A company issued 10-year,6% bonds with a par value of $1,000,000.The company received $960,000 upon issuance.Using the straight-line method,the amount of interest expense for the first semi-annual interest period is:

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The bond discount is $40,000 ($1,000,000 - $960,000). Over 10 years, or 20 semi-annual periods, the discount amortization per period is $2,000 ($40,000/20). The cash interest payment is $30,000 (6% of $1,000,000 / 2). Therefore, the interest expense is $32,000 ($30,000 + $2,000).

A Company Issued 10-Year,6% Bonds with a Par Value of $1,000,000.The