A company issued 10-year,7% bonds with a face value of $100,000.The company received $97,947 for the bonds.Using the straight-line method of amortization,the amount of interest expense for the first interest period is::

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The bond discount is $2,053 ($100,000 - $97,947). Using the straight-line method, the annual amortization of the discount is $205.30 ($2,053 / 10 years). The annual interest payment is $7,000 (7% of $100,000). Therefore, the total interest expense for the first period is $7,205.30 ($7,000 + $205.30).

A Company Issued 10-Year,7% Bonds with a Face Value of $100,000.The