Question

1. On July 1 of the current year a corporation issued (sold) $1,000,000 of its 12% bonds at par. The bonds pay interest June 30 and December 31. What amount of bond interest expense should the company report on its current year income statement?

Answer 1

	Bond interest expense to be reported = 1,000,000 * 12% * 6/12 = 60,000
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