On July 1,2018,Mason & Beech Services issued $33,000 of 10% bonds that mature in five years.They were issued at par.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On December 31,2018,what is the total amount paid to bondholders?

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Quizplus · Accepted Answer

The total amount paid to bondholders on December 31, 2018, would be for two interest periods (June 30 and December 31) because the bonds pay semiannual interest. The annual interest is 10% of $33,000, which is $3,300. Since interest is paid semiannually, each payment is half of the annual interest, so $3,300 / 2 = $1,650. Therefore, over two payment periods within the year, the total amount paid is $1,650 * 2 = $3,300.

On July 1,2018,Mason & Beech Services Issued $33,000 of 10