Question

On January 31, 2021, B Corp. issued $900,000 face value, 12% bonds for $900,000 cash. The bonds are dated December 31, 2020, and mature on December 31, 2030. Interest will be paid semiannually on June 30 and December 31. What amount of accrued interest payable should B report in its September 30, 2021, balance sheet

Answer 1

The amount of accrued interest payable should B report in its September 30, 2021, balance sheet is: $27,000.

Accrued interest payable

Using this formula

Accrued interest payable=(Face value×Bond percentage)/Number of months

Let plug in the formula

Accrued interest payable=($900,000×12%)/12×3 months

Accrued interest payable=$27,000

(July 01 to September 31=3 months)

Inconclusion the amount of accrued interest payable should B report in its September 30, 2021, balance sheet is: $27,000.

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