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Franklin Corporation issues $99,000, 10%, five-year bonds on January 1 for $103,500. Interest is paid semiannually on January

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Answer #1

Correct answer-----------(d) $4,500

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Bond issue price   $ 103,500
Face value $ 99,000
Premium on bonds payable $ 4,500
Number of Interest payments (5 years x 2)                           10
Discount/ premium to be amortized per Half year $ 450
Cash Interest on bond (99000 x 5%) $ 4,950
Interest expense to be recorded (4950-450) $ 4,500
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