Learni 10/21/2017 Chapter 11 Quiz 9. On January 1, 2017, Carter Sales issued $34

Question

Learni 10/21/2017 Chapter 11 Quiz 9. On January 1, 2017, Carter Sales issued $34,000 in bonds for $15 700. These are six-year bonds with a stated ite est rate of 16% and pay so a ualite et Carter Sales uses the straight-line method to artize the Bond Discount. What amount is debited to Intereet Expense on June 30, 2017? (Round your nower to the nearest dollar.) PA. $4.245 B. $2.720 O c. $37,507 O D. $1,525 anteed prm h e u payments on June 30 and Zander Services issued $40,000 of 13% bonds that mature i be years. The bonds pay see an On June December 31 of each year. On 10, 1, 2017 31, 2017, how much interest is paid to bondholders? O A. $5,200 O B. $3,705 C. $2.600 O D. $7.410

Explanation / Answer

9) Discount on bonds payable = (34000-15700) = 18300

Amortization of discount on bonds payable (each six month) = 18300/12 = 1525

Interest paid = (34000*16%*6/12) = 2720

Interest expenses = (2720+1525) = 4245

so answer is a) $4245

10) Interest paid on dec 31 = ( 40000*13%*6/12) = 2600

so answer is c) $2600

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