On January 2, 2016, garage master construction, Inc. issued $500,000, 10-year bonds for $574.540. The bonds...
On January 2, 2016, garage master construction, Inc. issued $500,000, 10-year bonds for $574.540. The bonds pay interest on June 30 and December 31. The face rate is 8% and the market rate is 6%. The interest expense on the on the bonds at June 30, 2016, is
a. $2,764
b. $17,236
c. $20,000
d. $22,764
Homework Answers
b. $17,236
| Interest Expense | = | Selling price of bond | * | Semi annual market rate | |||
| = | $ 5,74,540 | * | 3% | ||||
| = | $ 17,236 | ||||||
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