Question

On January​ 1, 2019, French Company issued​ $74,000 of​ five-year, 8% bonds when the market interest rate was​ 12%. The issue price of the bonds was​ $62,000. French uses the​ effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. How much interest expense will be recorded when the first interest payment is​ made? (Round your answer to the nearest dollar​ number.)

Answer 1

Answer:

The interest expense will be recorded when the first interest payment is​ made $3720

Explanation:

Interest expense = issue price x market rate x n/12

      = 62000 x 12 x 6/12

         = $3720