Windsor, Inc., issues 7%, 10-year bonds with a face amount of $1 million on January 1, Year 1, for $932,048, when the market rate of interest is 8%. Interest expense associated with this bond for the first semiannual period is:

Question

Business

Malachi Ali

4 April, 06:58

Windsor, Inc., issues 7%, 10-year bonds with a face amount of $1 million on January 1, Year 1, for $932,048, when the market rate of interest is 8%. Interest expense associated with this bond for the first semiannual period is:

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Answers (1)

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Lorenzo Blankenship · Answer 1

The Interest expense associated with this bond for the first semiannual period is $35,000.

Explanation:

interest expense for first semi annual period = $1,000,000*7%*1/2

= $35,000

Therefore, The Interest expense associated with this bond for the first semiannual period is $35,000.