When the interest payment dates are March 1 and September 1, and the bonds are issued on July 1, the amount of interest expense reported in the December 31 income statement for the year of issue would be for:
A)Six months.
B)Four months.
C)Ten months.
D)Twelve months.

Question

Quizplus · Accepted Answer

The bonds were issued on July 1, so the first interest payment date is September 1. The December 31 income statement would include interest expense for the four months from September 1 to December 31.

When the Interest Payment Dates Are March 1 and September