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

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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 ]

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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

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May 18th, 2015
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May 18th, 2015
Nov 22nd, 2017
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