A company issued $400,000,10-year,10 percent bonds at 104.What is the total amount of interest expense that will be recorded over the life of these bonds?

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Total interest payments = $400,000 F1F1F1S1F1F1F10 .10 F1F1F1S1F1F1F10 10 years = $400,000.Since the bonds were sold at a premium of $16,000,the interest expense to be recorded over the life of the bonds is $400,000 - $16,000 = $384,000.

A Company Issued $400,000,10-Year,10 Percent Bonds at 104