Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. What is the amount of interest expense Sparks will show with relation to these bonds for the year ended December 31, 2014?
A) $32,000
B) $33,840
C) $29,700
D) $25,100

Question

Quizplus · Accepted Answer

The Answer of Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. What is the amount of interest expense Sparks will show with relation to these bonds for the year ended December 31, 2014?
A) $32,000
B) $33,840
C) $29,700
D) $25,100

Sparks Company Received Proceeds of $423,000 on 10-Year, 8% Bonds