On January 1,your company issues a 5-year bond with a face value of $10,000 and a stated interest rate of 7%.The market interest rate is 5%.The issue price of the bond was $10,866.Using the effective interest method of amortization,the interest expense in the first year ended December 31 would be:
A)$700.00
B)$543.30.
C)$667.00
D)$758.80.

Question

Quizplus · Accepted Answer

10,866 * 5% = 543.30.

On January 1,your Company Issues a 5-Year Bond with a Face