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A company issued 5 - year, 8.00% bonds with a par value of $120,000. The market rate when the bonds were issued was 7.50%. The company received $122, 525 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is: Multiple Choice$4,800.00. $9,600.00.$ 4,594.69. $9, 126.45. $2,400.00.

A company issued 5 - year, 8.00% bonds with a par value of $120,000. The market rate when the bonds were issued was 7.50%. The company received $122, 525 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is: Multiple Choice$4,800.00. $9,600.00.$ 4,594.69. $9, 126.45. $2,400.00.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company issued 5 - year, 8.00% bonds with a par value of $120,000. The market rate when the bonds were issued was 7.50%. The company received $122, 525 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is: Multiple Choice$4,800.00. $9,600.00.$ 4,594.69. $9, 126.45. $2,400.00.
Transcribed Image Text:A company issued 5 - year, 8.00% bonds with a par value of $120,000. The market rate when the bonds were issued was 7.50%. The company received $122, 525 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is: Multiple Choice$4,800.00. $9,600.00.$ 4,594.69. $9, 126.45. $2,400.00.
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