Morgan Company issues 9%,20-year bonds with a par value of $750,000 that pay interest semiannually.The amount paid to the bondholders for each semiannual interest payment is.
A)$60,000.
B)$33,750.
C)$67,500.
D)$30,000.
E)$375,000.

Question

Quizplus · Accepted Answer

The semiannual interest payment can be calculated as follows: 
(Par value of bond x Annual interest rate)/2
= ($750,000 x 9%)/2
= $33,750
Therefore, the amount paid to bondholders for each semiannual interest payment is $33,750, which is option B.

Morgan Company Issues 9%,20-Year Bonds with a Par Value of $750,000