What is the interest expense on the bonds in 2010?
A)$800,000.
B)$680,759.
C)$342,961.
D)$119,241.Semiannual effective rate = $344,632 / $11,487,747 = 3% Interest expense = $341,261 + ($11,316,611 3%) = $680,759

Question

Quizplus · Accepted Answer

We need to use the semiannual effective rate of 3% and the bond carrying amount of $11,316,611 to calculate the interest expense for 2010. The calculation is as follows:
Interest expense = $341,261 + ($11,316,611 x 3%)
Interest expense = $341,261 + $339,498
Interest expense = $680,759
Therefore, the interest expense on the bonds in 2010 is $680,759, which is choice B.

What Is the Interest Expense on the Bonds in 2010