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On January 1, 2020, SPT Corp
On January 1, 2020, SPT Corp. sold $500,000, 4% bonds for $477,102 to yield 6% interest is payable semi-annually on January 1 and July 1. SPT Corp. uses the effective-interest method of amortizing bond discount. what amount should SPT Corp. report as interest expense for the six months ended June 30, 2020
Please solve this step by step using a financial calculator and how to input all the numbers. Thank you so much!!!
Expert Solution
Computation of Interest Expenses SPT Corp. should report for the six months ended June 30, 2020:
Interest Expenses for the Six Months = $477,102 * 6%/ 2
= $477,102 * 3%
= $14,313.06
SPT Corp. should report $14,313.06 as interest expense for the six months ended June 30, 2020.
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