On July 1, 2013, Rio Corporation issued bonds with a face value of $100,000 and 12% interest payable semiannually. The bonds mature on June 30, 2018. The market rate of interest at the time of issuance was 14%, so the bonds were issued at a discount of $7,054. Using the effective interest method, the amount of discount that should be amortized by Rio on December 31, 2013, is

Question

Quizplus · Accepted Answer

The Answer of On July 1, 2013, Rio Corporation issued bonds with a face value of $100,000 and 12% interest payable semiannually. The bonds mature on June 30, 2018. The market rate of interest at the time of issuance was 14%, so the bonds were issued at a discount of $7,054. Using the effective interest method, the amount of discount that should be amortized by Rio on December 31, 2013, is

On July 1, 2013, Rio Corporation Issued Bonds with a Face