Homework Answers
| Correct option is: e. $128,652 | ||
| Workings: | ||
| Interest expense for first year as per effective interest method: | ||
| Interest expense | = | $1,072,096 X 12% |
| = | $ 1,28,652 | |
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A corporation issued $580000, 10%, 5-year bonds on January 1, 2020 for $626400, which reflects an...
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2020 for $626400, which reflects an effective-interest rate of 7%.
Interest is paid annually on January 1. If the corporation uses the
effective-interest method of amortization of bond premium, the
amount of bond interest expense to be recognized on December 31,
2020, is
$40600.
$43848.
$58000.
$62640.
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