A company issued 10-year,7% bonds with a face value of $100,000.The company received $97,947 for the bonds.Using the straight-line method of amortization,the amount of interest expense for the first interest period is:
A)7,000.00
B)7,205.30
C)6,794.70
D)2,053.00

Question

Quizplus · Accepted Answer

Discount on bonds payable = $100,000 - $97,947 = $2,053.
Interest paid = 7% x $100,000 = $7,000
Interest expense = $7000 + 2053/10 = $7,205.30.

A Company Issued 10-Year,7% Bonds with a Face Value of $100,000.The