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Step2247 [10]
3 years ago
14

On January 2, 20X1, Schneider Company issues $100,000 of 6% bonds. Interest of $3,000 is payable semi-annually on June 30 and De

cember 31. The bonds mature in 5 years. The bonds issued for $95,842 with an effective interest rate of 7%. Effective interest recognized on June 30, 20X1, will be equal to _____. (round to the nearest full dollar)
Business
1 answer:
____ [38]3 years ago
3 0

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

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The statement is true

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Suppose a farmer in Georgia begins to grow peaches. He uses​ $1,000,000 in savings to purchase​ land, he rents equipment for ​$7
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Explanation:

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= (22%×  1,000,000) + 40,000

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