If a $15,000,8 percent,20-year bond was issued at 96 on November 1,how much will accrued interest payable be on December 31 if interest payments are made annually?

Question

Quizplus · Accepted Answer

The bond pays 8% interest annually on $15,000, which is $1,200 per year. Since the bond was issued on November 1 and interest is calculated until December 31, the accrued interest for 2 months (November and December) is (2/12) * $1,200 = $200.

If a $15,000,8 Percent,20-Year Bond Was Issued at 96 on November