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28 March, 15:15

On January 1, the Kings Corporation issued 10% bonds with a face value of $98,000. The bonds are sold for $96,040. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, ten years from now. Kings records straight-line amortization of the bond discount. Determine the bond interest expense for the year ended December 31 of the first year is. Select the correct answer. $9,800 $9,604 $9,996 $1,960

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  1. 28 March, 15:38
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    The correct answer is $9,800

    Explanation:

    Solution:

    Recall that

    Kings Corporation issued bonds of = 10%

    Face value = $98,000

    Bonds sold for = 96,040

    Determine the bond interest expense for the year ended December 31 of the first year

    Now,

    $98,000 * 10 bond = 9,800

    Therefore, the bond interest expense for the year ended December 31 of the first year is + $9,800
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