Spring Company sells $250,000 of 6%,15-year bonds for 56.886 on April 1,2021.The market rate of interest on that day is12.5%. Interest is paid each year on April 1. The issue price of the bond is $142,215.Spring Company uses the straight-line amortization method. The amount of interest expense for each year will be (Round intermediary calculations to the nearest whole number.) Part 1 A. $15,000. B. $16,615. C. $22,186. D. $38,436. E. none of these.

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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Spring Company sells $250,000 of 6%,15-year
bonds for 56.886 on April 1,2021. The market rate
of interest on that day is12.5%. Interest is paid
each year on April 1. The issue price of the bond
is$142,215.Spring
Company uses the straight-line amortization
method. The amount of interest expense for each
year will be (Round intermediary calculations to
the nearest whole number.)
Part 1
A.
$15,000.
B.
$16,615.
C.
$22,186.
D.
$38,436.
E.
none of these.
Transcribed Image Text:Spring Company sells $250,000 of 6%,15-year bonds for 56.886 on April 1,2021. The market rate of interest on that day is12.5%. Interest is paid each year on April 1. The issue price of the bond is$142,215.Spring Company uses the straight-line amortization method. The amount of interest expense for each year will be (Round intermediary calculations to the nearest whole number.) Part 1 A. $15,000. B. $16,615. C. $22,186. D. $38,436. E. none of these.
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