McDonald Sales prepared a debenture issue of $20 000 dated 1 January 2013. The debentures have a stated rate of 3% and a term of 6 years. The debenture issue was delayed, and the debentures were finally sold on 1 March 2013 at par. On 30 June 2013, the first half- yearly interest payment is made. How much will be paid out to debenture holders on 30 June 2013?
A)$300
B)$600
C)$100
D)$200

Question

Quizplus · Accepted Answer

The interest for the period from 1 March 2013 to 30 June 2013 is calculated as follows: $20,000 * 3% * (4/12) = $200.

McDonald Sales Prepared a Debenture Issue of $20 000 Dated