On January 1,2019,Commercial Equipment Sales issued $28,000 in bonds for $15,700.These are six-year bonds with a stated interest rate of 10%,and pay semiannual interest on June 30 and December 31.Commercial Equipment Sales uses the straight-line method to amortize the Bond Discount.What amount is debited to Interest Expense on June 30,2019?

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The total interest expense includes the cash interest payment plus the amortization of the bond discount. The cash interest payment is calculated as the face value of the bonds ($28,000) multiplied by the stated interest rate (10%) and then divided by 2 (for semiannual payments), which equals $1,400. The bond discount is the difference between the face value ($28,000) and the issued price ($15,700), which equals $12,300. This discount is amortized evenly over the life of the bond (6 years * 2 = 12 periods), resulting in an amortization of $1,025 per period ($12,300 / 12). Therefore, the total interest expense is $1,400 (cash interest payment) + $1,025 (amortization of discount) = $2,425.

On January 1,2019,Commercial Equipment Sales Issued $28,000 in Bonds for $15,700.These