On November 1, 2017, Austin Services issued $304,000 of five-year bonds with a stated rate of 11%. The bonds were issued at par, and Austin makes semiannual payments on April 30 and October 31. On December 31, 2017, Austin made an adjusting entry to accrue interest at year-end. No further entries were made until April 30, 2018, when the first payment was made. What amount of interest expense was recorded for the period of January 1 to April 30, 2018? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

The amount of interest expense was recorded for the period of January 1 to April 30, 2018 would be $11,147

Explanation:

According to the given data we have the following:

Bonds Amount=$304,000

Stated rate of interest=11%

To calculate the amount of interest expense was recorded for the period of January 1 to April 30, 2018 we have to calculate the following formula as follows:

Interest expense for period (Jan-April) = Semi Annual Interest-Interest expense payable on Dec31

Semi Annual Interest=$304,000*11%*6/12 = $16,720

Interest expense payable on Dec31=$304,000*11%*2/12=$5,573

Therefore Interest expense for period (Jan-April) = $16,720-$5,573=$11,147

The Journal Entry would be as follows:

Debit $ Credit $

30-Apr Interest expense Account Dr. $11,147

Interest expense Payable Account Dr. $5,573

Cash Account $16,720