On 1 January 2014, Davie Services issued $20 000 of 8% debentures that mature in five years. They were sold at par. The debentures pay half- yearly interest payments on 30 June and 31 December of each year. On 30 June 2014, how much are the total interest payments made to debenture holders?
A)$800.00
B)$133.33
C)$1 600.00
D)$160.00

Question

Quizplus · Accepted Answer

The total interest payment for the half-year period is calculated as 8% of $20,000 divided by 2 (since interest is paid semi-annually), which equals $800.00.

On 1 January 2014, Davie Services Issued $20 000 of 8