On January 1, Year 4, Jones Realty Company issued 8 percent term bonds with a face amount of $1 million due January 1, Year 14.Interest is payable semi-annually on January 1 and July 1.On the date of issue, investors were willing to accept an effective interest rate of 6 percent.Assume the bonds were issued on January 1, Year 4.for $1,148,959.Using the effective interest amortization method, Jones Realty Company recorded interest expense for the six months ended June 30, Year 4, in the amount of

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The interest expense using the effective interest rate method is calculated by multiplying the carrying amount of the bonds at the beginning of the period by the effective interest rate for the period. The carrying amount at issuance is $1,148,959, and the semi-annual effective interest rate is 3% (6% annual rate divided by 2). Thus, the interest expense for the first six months is $1,148,959 * 3% = $34,469.

On January 1, Year 4, Jones Realty Company Issued 8