Answer:
$62,445
Explanation:
Discount on bond payable = ($1,000,000 / 100) x (100-97) = 30,000
Number of period = 2 x 10 = 20
Discount amortized every period = 30,000 / 20 = $1,500
Interest Expense on June 30 = (1,000,000 x 6%/2) + 1500 = $31,500
Principal Payment = $50,000 - $31,500 = $18,500
Outstanding bonds = 1,000,000 - $18,500 = $981,500
Interest Expense on December 31 = ($981,500 x 6%/2) + 1500 = $30,945
Total Interest Expense in 2020 = $31,500 + $30,945 = $62,445
