Homework Answers
| Discount on issue of bond =$15000000-14000000 | ||
| =$1000000 | ||
| Discount to be amortized as per effective interest method and recognized as interest expenses. | ||
| Interest expenses as per effective interest method | ||
| = Issue price of bond * effective interest rate *6 month/12 month | ||
| =$14000000*10%*6/12 | ||
| $ 7,00,000 | ||
| Correct Option: SECOND | ||
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