On July 1,2018,Electrical Services issued $37,000 of 8% bonds that mature in five years.The bonds were issued at a premium,for a total of $38,665.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?

Question

Quizplus · Accepted Answer

The total amount paid to bondholders on December 31, 2018, would be the semiannual interest payment. The annual interest is 8% of $37,000, which is $2,960. Since interest is paid semiannually, each payment is half of the annual interest, so $2,960 / 2 = $1,480.

On July 1,2018,Electrical Services Issued $37,000 of 8% Bonds That