Seamark buys $300,000 of Eider's 8% five-year bonds payable at par value. Interest payments are made semiannually. All of the following regarding accounting for the securities are EXCEPT:

Question

Quizplus · Accepted Answer

The semiannual interest payment amount for 8% five-year bonds payable semiannually is calculated as (Face value of the bond x Coupon rate x Time period) / Number of coupon payments per year. 
Therefore, the semiannual interest payment amount is ($300,000 x 8% x 6/12) / 2 = $12,000. 
Option D, which states that the semiannual interest payment amount is $24,000, is incorrect.

Seamark Buys $300,000 of Eider's 8% Five-Year Bonds Payable at Par