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27 March, 15:06

On January 1, 2018, Legion Company sold $200,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $177,000, priced to yield 12%. Legion records interest at the effective rate. Legion should pay cash interest for the six months ended June 30, 2018, in the amount of:a. $10,000.

b. $12,000.

c. $10,620.

d. $8,850.

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Answers (1)
  1. 27 March, 15:28
    0
    Correct option is A $10,000

    Explanation:

    10% * ½ * $200,000 = $10,000.
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