On January 31, 2018, B Corp. issued $600,000 face value, 12% bonds for $600,000 cash. The bonds are dated December 31, 2017, and mature on December 31, 2027. Interest will be paid semiannually on June 30 and December 31.
- What amount of accrued interest payable should B report in its September 30, 2018, balance sheet?

Question

Quizplus · Accepted Answer

The interest payable at September 30, 2018, will be for the three months' interest that has accrued since the last interest was paid on June 30, 2018 ($600,000 × 12% × 3/12 = $18,000).