Answer:
Effective interest recognized on June 30, 20X1, will be equal to $3,354
Explanation:
Data provided from the question,
Amount of bond issued on January 2, 20X1 = $100,000 of 6% bonds
Interest = $3000
Payable semi-annually on June 30 and December 31
Number of years to mature = 5 years
The bond issued for $95,842 with an effective interest rate of 7%
Therefore, the Effective interest recognized on June 30, 20X1 =
bond issued × effective interest rate × semiannually(1/2)
= $95,842 x 0.07 x 0.5
= $3,354
