On March 2, 2019, 20-year, 6 percent, general obligation serial bonds were issued at the face amount of $3,000,000. Interest of 6 percent per annum is due semiannually on March 1 and September 1. The first payment of $150,000 for redemption of principal is due on March 1, 2020. Fiscal year-end occurs on December 31. What is the interest expense for the fiscal year ending December 31, 2019?

Question

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The interest expense for 2019 includes two semiannual payments. The first payment on September 1, 2019, is $90,000 (6% of $3,000,000 for half a year), and the second payment on March 1, 2020, is also $90,000. However, for the fiscal year ending December 31, 2019, only the September 1 payment is considered, so the interest expense is $90,000.

On March 2, 2019, 20-Year, 6 Percent, General Obligation Serial