Landmark Corp.buys $300,000 of Schroeter Company's 8%,5-year bonds,at par value on September 1.Interest payments are made semiannually.All of the following regarding accounting for these securities are true except:

Question

Quizplus · Accepted Answer

The semiannual interest payment amount is actually $12,000, not $24,000. This is because the interest rate is 8% and the bond has a face value of $300,000, so the annual interest payment is $24,000. Half of that amount is paid semiannually, which is $12,000.