Sunset Corporation issued$360,000 of 6%,10-year bonds on January 1,2021,for$311,076.This price provided a yield of 8%on the...
Homework Answers
Interest paid on June 30 = 360000*6%*6/12 = 10800
Interest expense on June 30 = 311076*8%*6/12 = 12443
Discount amortized = 12443-10800 = 1643
Interest paid on October 31 = 360000*6%*4/12 = 7200
Interest expense on October 31 = (311076+1643)*8%*4/12 = 8339
The amount of interest expense reported on the income statement = 12443+8339 = 20782
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Sunset Corporation issued$360,000 of 6%,10-year bonds on
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