DeKay Dental Supplies issued $10,000 of bonds on January 1, 2018. The bonds pay interest semiannually. This is a partial bond amortization schedule for the bonds. What is the stated annual rate of interest on the bonds?

Question

DeKay Dental Supplies issued $10,000 of bonds on January 1, 2018. The bonds pay interest semiannually. This is a partial bond amortization schedule for the bonds.  What is the stated annual rate of interest on the bonds?

Quizplus · Accepted Answer

$400 / $10,000 = 0.04 semi-annual rate
0.04 × 2 = 0.08 annual rate

DeKay Dental Supplies Issued $10,000 of Bonds on January 1