Answer:
d. 6%
Explanation:
cash paid = $300,000 per coupon
semiannual interest rate = coupon payment / face value = $300,000 / $10,000,000 = 0.03 = 3%
stated annual interest rate = semiannual interest rate x 2 = 3% x 2 = 6%
the interest expense is higher because it includes the amortization of bond discount
Answer:
tell how you feel. ignore it. under the table discipline
Answer:
$307
Explanation:
The computation of the interest expense is shown below:
= Principal × rate of interest × number of days ÷ (total number of days in a year)
= $80,000 × 6% × (23 days ÷ 360 days)
= $307
The 23 days is taking from July 8 to July 31
We simply applied the simple interest formula by multiplying the principal amount with the rate of interest and the time period