Exhibit 14-3 Jones Corporation issued $400,000 of its 8%, 10-year bonds, dated January 1, 2013, at face value plus accrued interest on May 1, 2013. Interest is paid on January 1 and July 1. Jones uses the most common method to record the sale of the bonds between interest payment periods.
-Refer to Exhibit 14-3. The amount of bond interest expense reported on the year-end 2013 income statement would be

Question

Quizplus · Accepted Answer

The amount of bond interest expense for the year 2013 would be calculated as follows:

Interest expense from May 1, 2013 (date of issuance) to December 31, 2013 (year-end) = $400,000 x 8% x (8/12) = $21,333

Therefore, the correct answer is B, $21,333.

Exhibit 14-3 Jones Corporation Issued $400,000 of Its 8%, 10-Year