A company issued five-year, 5% bonds with a par value of $100,000. The company received $95,735 for the bonds. Using the straight-line method, the company’s interest expense for the first semiannual interest period is a. $2,926.50. c. $2,500.00. e. $9,573.50. b. $5,853.00. d. $5,000.00.

A company issued five-year, 5% bonds with a par value of $100,000. The company received $95,735 for the bonds. Using the straight-line method, the company’s interest expense for the first semiannual interest period is a. $2,926.50. c. $2,500.00. e. $9,573.50. b. $5,853.00. d. $5,000.00.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company issued five-year, 5% bonds with a par value of
$100,000. The company received $95,735 for the bonds.
Using the straight-line method, the company’s interest expense
for the first semiannual interest period is
a. $2,926.50. c. $2,500.00. e. $9,573.50.
b. $5,853.00. d. $5,000.00.

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