On January 1,2010,Lane issues $700,000 of 7%,15-year bonds at a price of 106 3/4.The interest payments are made on June 30 and December 31.Lane elects a fiscal year ending September 30.What is the amount that would be recorded as Interest Expense in the December 31,2010 journal entry?
A)$24,500
B)$22,925
C)$12,250
D)$11,462
E)$13,458

Question

Quizplus · Accepted Answer

(700,000*.07*6/12) = 24,500 - 12,250 (Int. Pay) - 788 (Prem.) = $11,462

On January 1,2010,Lane Issues $700,000 of 7%,15-Year Bonds at a Price