If a $6,000,10 percent,10-year bond was issued at 104 on October 1,how much will accrued interest payable be on December 31 if interest payments are made annually?

Question

Quizplus · Accepted Answer

The bond pays 10% annual interest on $6,000, which is $600 per year. Since interest payments are made annually, the accrued interest from October 1 to December 31 (3 months) is $600 * (3/12) = $150.

If a $6,000,10 Percent,10-Year Bond Was Issued at 104 on October