On June 1, $40,000 of treasury bonds were purchased between interest dates. The broker commission was $600. The bonds pay intere

Question

2 years ago

8

On June 1, $40,000 of treasury bonds were purchased between interest dates. The broker commission was $600. The bonds pay intere

st at 12%, which is paid semiannually on January 1 and July 1. How much interest revenue will be recorded on July 1?
a. $400.
b. $2,000.
c. $2,400.
d. $406.

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1 answer:

lyudmila [28] · Answer 1 · 2022-10-07T10:06:34+03:00

Answer: $400

Explanation:

The amount of interest revenue that will be recorded on July 1 will be calculated thus:

Interest revenue = Face value × Interest percentage × 1/12

= $40,000 × 12% × 1/12

= $40000 × 0.12 × 0.08333

= $400

Therefore, the interest revenue that will be recorded on July 1 is $400.