On January 1, 2021, White Water issues $410,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and
December 31 each year.
Assuming the market interest rate on the issue date is 8%, the bonds will issue at $382,141.
Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.)
Assuming the market interest rate on the issue date is 8%, the bonds will issue at $382,141.
Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.)
1 answer:
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Answer:
B. $840
Step-by-step explanation:
Given that
Rate of simple interest = 3.5%
Principal amount = $12,000
Time = 2 year
To find:
Interest earned = ?
Solution:
Formula for Simple Interest is given as:
Where P is the principal amount
R is the annual Rate of interest
T is the time for which principal was invested.
Here, we are given that:
P = $12,000
R = 3.5%
T = 2 years
Putting all the values in the formula:
So, answer is:
B. $840