Jones Corporation issues $400,000,10%,five-year bonds at face value.The total interest expense over the life of the bonds is:

Name: Jones Corporation issues $400,000,10%,five-year bonds at face value.The total interest expense over the life of the bonds is:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The total interest expense over the life of the bonds can be calculated as:

Total interest expense = face value of bonds x annual interest rate x time

= $400,000 x 10% x 5 years

= $200,000

Therefore, the correct answer is choice C.

Jones Corporation Issues $400,000,10%,five-Year Bonds at Face Value