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tiny-mole [99]
3 years ago
15

A company issues $15,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2012. Interest is paid on June 30 and December 31. T

he proceeds from the bonds are $14,703,109.
Using effective-interest amortization, how much interest expense will be recognized in 2012?
a. $585,000b. $1,170,000c. $1,176,374d. $1,176,249
Business
1 answer:
mezya [45]3 years ago
7 0

Answer:

Interest Expense for 2017 is $1,176,373

Explanation:

Interese Expense to be recognized in 2017 is $1,176,373

Interest Expense for Jan-Jun = $14,703,108 * 8%/2 = $588,124

Amortization of Discount= ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)

= $588,124 - $585,000 = $3,124

Carry Amount of Bond on June 30 = $14,703,108 + ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)

= $14,703,108 + $588,124 - $585,000 = $14,706,232

Interest Expense for Jun-Dec= [$14,703,108 + ($14,703,108 * 8%/2) - ($15,000,000* 7.8%/2)] *8% /2

= ($14,703,108 + $588,124 - $585,000) *8% /2

=  $14,706,232  *8% /2 = $588,249

Interest Expense for 2017 = $588,124 + $588,249 = $1,176,373

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"D" is the correct answer.

All of these.

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NOTE: in this question, options part is missing, The option for the following question is :

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Gross Domestic Product is the overall financial or retail value of all completed production of goods and services in a specific period within a country.

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Dennis_Churaev [7]

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A debit will increase asset or fee debts and decreases legal responsibility, sales, or fairness debts. A credit is continually located at the proper aspect of access. It increases legal responsibility, revenue, or equity money owed and reduces asset or cost money owed.

Purchasing is the buying of goods or offerings. An item that has been bought is known as a purchase. the opposite of a purchase is a sale. In not unusual usage, the shorter word "purchase" is usually used whilst buying, instead of the phrase "buy".

Learn more about assets here brainly.com/question/25746199

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