On 1 January 2014, Davie Services issued $20 000 of 8% debentures that mature in five years. They were sold at discount, for a total of $19 000. The debentures pay half- yearly interest payments on 30 June and 31 December of each year. On 30 June 2014, how much is the total amount paid to debenture holders?
A)$253.33
B)$760.00
C)$1 520.00
D)$800.00

Question

Quizplus · Accepted Answer

The total amount paid to debenture holders on 30 June 2014 is the half-yearly interest payment. The annual interest is 8% of $20,000, which is $1,600. Therefore, the half-yearly interest payment is $800.

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