What is the total interest cost of the bonds​?

label Mathematics
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

Shakey Company issued $500,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the total interest cost of the bonds

Nov 19th, 2015

Thank you for the opportunity to help you with your question!

Hi,

Please find the detailed answer as follows:

Part A:

Total Interest Cost = (500000*6%*5) + 500000*(1 -.98) = $160000


Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 19th, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
Nov 19th, 2015
...
Nov 19th, 2015
Oct 23rd, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer