On June 30, 2021, L. N. Bean issued $11 million of its 8% bonds for $10 million. The bonds were priced to yield 10%. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, how much bond interest expense should the company report for the 6 months ended December 31, 2021?
Multiple Choice
$460,000
$550,000
$440,000
$500,000
Interest expense for the 6 months ended December 31, 2021 = Carrying value * Effective interest rate/2
= $10,000,000 * 10% / 2
= $500,000
On June 30, 2021, L. N. Bean issued $11 million of its 8% bonds for $10...