On June 1,2015,Smith & Beecham Services issued $30,000 of 7.50% bonds that mature in five years.They were sold at a premium,for a total of $31,250.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On December 31,2015,what is the total amount paid to bondholders?

Question

Quizplus · Accepted Answer

The correct answer is A because the total amount paid to bondholders is the sum of the interest payments made on June 30 and December 31, 2015. The interest payment for each period is $30,000 x 7.50% / 2 = $1,125.00. Therefore, the total amount paid to bondholders is $1,125.00 + $1,125.00 = $2,250.00.

On June 1,2015,Smith & Beecham Services Issued $30,000 of 7