Ask Question
20 April, 16:12

On January 1, 2021, Legion Company sold $250,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $163,976, priced to yield 12%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)

+4
Answers (1)
  1. 20 April, 18:48
    0
    The bond interest expense to be shown in profit or loss as t 30 June 2021

    $9,838.56

    Explanation:

    The bond interest expense is the actual finance cost of using the funds made available by bondholders while the coupon payment is the portion of the finance cost paid to them periodically.

    Interest expense=bonds cash proceeds*yield to maturity*6/12

    bonds cash proceeds is $163,976

    yield to maturity is 12%

    interest expense=$163,976*12%*6/12=$9,838.56
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On January 1, 2021, Legion Company sold $250,000 of 6% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers