What is the amount of interest expense for the first semiannual interest period?

Accounting
Tutor: None Selected Time limit: 1 Day

company issued 7%, 5-year bond with par value of $100,000. Market rate of bonds issued was 7.5%. the company recieved $97,947 cash.Use effective interest method

May 18th, 2015

Dr Cash $97,947
Dr Bonds discount $2,053
Cr Bonds payable $100,000

The interest expense for the 1st semiannual interest is = carrying value of the bond x 0.0375* = $97,947 x 0.0375 = $3,673.01.

*0.0375 is half of mkt rate of 7.5%. Half cos it's semiannual.

The journal entry for the 1st semiannual interest payment wld be:
Dr Interest expense $3,673.01
Cr Bonds discount $173.01
Cr Cash $3,500.00 ................................................give me star

May 18th, 2015

wow! thank you so much! I have a few more questions if you're interested in helping me? my friend and i are lost on these last few

May 18th, 2015

yeah sure plz give me 5 stars..and put the questions i will bid then accept

May 18th, 2015

I just rated you five stars. 


Company borrowed 50,000 cash from bank, signed 6 year note at 7%. Present value of an annuity for 6 years at 7% is 4.7665. Annual annuity payments equal $10,490. present value of the loan is:

May 18th, 2015

what amount u will pay me??

May 18th, 2015

$1

May 18th, 2015

$3.00 for both

May 18th, 2015
  50,000 / 4.7665 = $10,489.79<<assuming annual payments and full amortization

5s tar ............................

May 18th, 2015

ok I want to pay you to answer 4 more questions plus the 2 you just gave me. How do I pay you?

May 18th, 2015

so $9 all together

May 18th, 2015
The present value of the $ 50,000 loan IS $ 50,000 , because the company received that money NOW.

I don't see where the concept of annuity payments comes into play.
[That's where the $ 62,940 is coming from : ( $ 10,490 x 6 ) = $ 62,940 ]

---------
The total interest on the loan will be

[ $ 50,000 x 0.07 x 6 ] = $ 21,000

or

( $ 21,000 / 6 ) = $ 3,500 per year.

? ยท 3 years ago

this is rite ans ...............pay me 3$


May 18th, 2015

10$

May 18th, 2015

also give me stars

May 18th, 2015

ok 10 works. where do I pay

May 18th, 2015

place ans and i will bid acept my bid..............understand??

May 18th, 2015

are u there??

May 18th, 2015

u pay me last questins money??

May 18th, 2015

I'm trying to figure it out. How to pay u

May 18th, 2015

you dont know how to place a bid??

May 18th, 2015

no I literally just signed up on here 10 minutes ago

May 18th, 2015

place all questions at a time

May 18th, 2015

thats the way u have done place questions i will bid and accept my bid

May 18th, 2015

Studypool's Notebank makes it easy to buy and sell old notes, study guides, reviews, etc.
Click to visit
The Notebank
...
May 18th, 2015
...
May 18th, 2015
Dec 11th, 2016
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