On January 2,2014,Mahoney Sales issued $10,000 in bonds for $9,400.They were 5-year bonds with a stated rate of 4%,and pay semiannual interest payments.Mahoney Sales uses the straight-line method to amortize the bond discount.On June 30,2014,when Mahoney makes the first payment to bondholders,how much will they report as interest expense?

Question

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B) Calculations: ($10,000 × 4% × 6/12) + ($600/5 × 6/12) = $260

On January 2,2014,Mahoney Sales Issued $10,000 in Bonds for $9,400