16. Perez Company sold five-year, 8% bonds on October 1, 2021. The face amount of the bonds was $100,000, while the issue price was $102,000. Interest is payable on April 1 of each year. The fiscal year of Perez Company ends on December 31. How much interest expense will Perez Company report in its December 31, 2021, income statement (assume straight-line amortization)? A. $1900. B. $2,000. C. $1,778. D. $2,040.

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Chapter1: Financial Statements And Business Decisions
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16. Perez Company sold five-year, 8% bonds on October 1, 2021. The face amount of the bonds was $100,000, while the issue price was $102,000. Interest is payable on April 1
of each year. The fiscal year of Perez Company ends on December 31. How much interest expense will Perez Company report in its December 31, 2021, income statement
(assume straight-line amortization)?
A. $1900.
B. $2,000.
C. $1,778.
D. $2,040.
Transcribed Image Text:16. Perez Company sold five-year, 8% bonds on October 1, 2021. The face amount of the bonds was $100,000, while the issue price was $102,000. Interest is payable on April 1 of each year. The fiscal year of Perez Company ends on December 31. How much interest expense will Perez Company report in its December 31, 2021, income statement (assume straight-line amortization)? A. $1900. B. $2,000. C. $1,778. D. $2,040.
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