How much is the interest expense for the year 2020? On May 1, 2019, PAPASAKA Company issued a five-year P 2,000,000face value bonds with stated rate of 16%. The bonds were issued to yield14%. Interests are payable semi-annually on March 1 and September 1.PAPASAKA Company uses the calendar year and the effective interestmethod of amortization. Present value of 1 at 7% for 10 periods is0.5084. Present value of an ordinary annuity of 1 at 7% for 10 periods is7.0236.How much is the interest expense for the year 2020?O 160,000199,550296,447295,360

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How much is the interest expense for the year 2020?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Question

How much is the interest expense for the year 2020?

On May 1, 2019, PAPASAKA Company issued a five-year P 2,000,000
face value bonds with stated rate of 16%. The bonds were issued to yield
14%. Interests are payable semi-annually on March 1 and September 1.
PAPASAKA Company uses the calendar year and the effective interest
method of amortization. Present value of 1 at 7% for 10 periods is
0.5084. Present value of an ordinary annuity of 1 at 7% for 10 periods is
7.0236.
How much is the interest expense for the year 2020?
O 160,000
199,550
296,447
295,360

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