On January 1, 2002, Matlock Inc. issued its 10 percent bonds in the face amount of $1,500,000. They mature on January 1, 2012. The bonds were issued for $1,329,000 to yield 12 percent, resulting in bond discount of $171,000. Matlock uses the effective-interest method of amortizing bond discount. Interest is payable July 1 and January 1. For the six months ended June 30, 2002, Matlock should report bond interest expense of a. $75,000. b. $79,740. c. $83,550. d. $85,260.
On January 1, 2002, Matlock Inc. issued its 10 percent bonds in the face amount of $1,500,000. They mature on January 1, 2012. The bonds were issued for $1,329,000 to yield 12 percent, resulting in bond discount of $171,000. Matlock uses the effective-interest method of amortizing bond discount. Interest is payable July 1 and January 1. For the six months ended June 30, 2002, Matlock should report bond interest expense of a. $75,000. b. $79,740. c. $83,550. d. $85,260.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2002, Matlock Inc. issued its 10 percent bonds in the face amount of $1,500,000. They mature on January 1, 2012. The bonds were issued for $1,329,000 to yield 12 percent, resulting in bond discount of $171,000. Matlock uses the effective-interest method of amortizing bond discount. Interest is payable July 1 and January 1. For the six months ended June 30, 2002, Matlock should report bond interest expense of
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