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Sergio039 [100]

3 years ago

10

On January 1 of the current year, Barton Corporation issued 11% bonds with a face value of $99,000. The bonds are sold for $94,0

50. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is

1 answer:

Bogdan [553]3 years ago

3 0

Answer:

$11,880

Explanation:

Calculation to determine The bond interest expense for the year ended December 31 is

First step

Semiannual interest=($99,000 * 0.11 * 6/12)

Semiannual interest= $5445

Second step

Semi-annual discount amortization

Semi-annual discount amortization=($99,000 - $94,050)/5*/12

Semi-annual discount amortization=($4950 / 5)*6/12

Semi-annual discount amortization= 495

Third step

Semiannual interest expense=(5445 + 495)

Semiannual interest expense = $5940

Now let determine the bond interest expense

Bond interest expense =($5940 * 2)

Bond interest expense = $11880

Therefore The bond interest expense for the year ended December 31 is $11,880

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$[tex]2,219,827.69=A(142.7729593)$

$\frac{2,219,827.69}{142.7729593} =A$

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