Homework Answers
The interest expense did InterTech record for the December 31, 2017 payment is $76863
Explanation:
Present value redumption value =$21,75000 *pvif (@4%, 16year)
= 2175000*0.5339
= $1161232
Present value of Interest = $65250 *pvifa (@4%, 16year) (2175000*.06*6/12) int
= $65,250 *11.6522
= $7,60,306.05
Present value of bond = Present value redumption value + Present value of Interest
= $1161232+ $760306.05= $19,21,538
Interest expense recorded on December 31, 2017 = $19,21,538*8%*1/2
= $76863 (approx)
Therefore, the interest expense did InterTech record for the December 31, 2017 payment is $76863
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