A company issues $10,000,000, 7

Accounting Dec 11, 2020

A company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. Using effective-interest amortization, how much interest expense will be recognized on June 30, 2019?

$392,083

$390,000

$780,000

$400,000

Expert Solution

If we calculate interest expense for June 30, 2019 then the answer will be $393,206 which is not given in the options. So, May be it is asking for June 30, 2014 Then the correct option will be 1st "$392,083"

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