Ferris Wheeler Co. 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 interest expense on the bonds for the year ended December 31, 2019?

Question

Ferris Wheeler Co. 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 interest expense on the bonds for the year ended December 31, 2019?

Quizplus · Accepted Answer

Semiannual effective rate = $409 / $9,080 = .045
Interest expense = $409 + ($9,107 × 4.5%) = $819