Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2019.The bonds had a face value of $600,000, pay interest annually on December 31, and have a call price of 102.Sparks uses the straight-line method of amortization.What is the amount of interest Sparks must pay the bondholders in 2019?
A)$50,760
B)$48,000
C)$48,960
D)$5,076

Question

Quizplus · Accepted Answer

The interest payment is calculated as the face value of the bonds ($600,000) multiplied by the stated interest rate (8%), which equals $48,000.

Sparks Company Received Proceeds of $634,500 on 10-Year, 8% Bonds