On January 1, 2011, Bally Co.issued a $500,000, 6%, 8-year bond with interest payable semi-annually at par.The issuance price of the bond and the first period's interest expense are closest to:
$$\begin{array} { | l | c | c | }
\hline & \text { Issue price: } & \text { Interest expense: } \
\hline \text { a. } & \$ 500,000 & \$ 15,000 \
\hline \text { ๖. } & \$ 500,000 & \$ 30,000 \
\hline \text { c. } & \$ 470,000 & \$ 15,000 \
\hline \text { d } & \$ 470,000 & \$ 30,000 \
\hline
\end{array}$$

Question

On January 1, 2011, Bally Co.issued a $500,000, 6%, 8-year bond with interest payable semi-annually at par.The issuance price of the bond and the first period's interest expense are closest to:
$$\begin{array} { | l | c | c | } 
\hline & \text { Issue price: } & \text { Interest expense: } \
\hline \text { a. } & \$ 500,000 & \$ 15,000 \
\hline \text { ๖. } & \$ 500,000 & \$ 30,000 \
\hline \text { c. } & \$ 470,000 & \$ 15,000 \
\hline \text { d } & \$ 470,000 & \$ 30,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of On January 1, 2011, Bally Co.issued a $500,000, 6%, 8-year bond with interest payable semi-annually at par.The issuance price of the bond and the first period's interest expense are closest to:
$$\begin{array} { | l | c | c | } 
\hline & \text { Issue price: } & \text { Interest expense: } \
\hline \text { a. } & \$ 500,000 & \$ 15,000 \
\hline \text { ๖. } & \$ 500,000 & \$ 30,000 \
\hline \text { c. } & \$ 470,000 & \$ 15,000 \
\hline \text { d } & \$ 470,000 & \$ 30,000 \
\hline
\end{array}$$