Q2. Barney Inc. has a December 31 fiscal year. On February 1, year I. Barney Inc. issued bonds that pay interest on July 31 and January 31. The bonds were issued for $108000. The bonds have a face value of $87000. The bonds pay interest at an annual interest rate of 8%. The annual market rate on the bonds at the time they were issued was 4%. The current annual market rate on bonds is 8%. Calculate interest expense on the bonds for the year ended December 31. year1. Round your answer to the nearest dollar. (Please note that you do not require present value tables to answer this question so their omission is deliberate.)

Q2. Barney Inc. has a December 31 fiscal year. On February 1, year I. Barney Inc. issued bonds that pay interest on July 31 and January 31. The bonds were issued for $108000. The bonds have a face value of $87000. The bonds pay interest at an annual interest rate of 8%. The annual market rate on the bonds at the time they were issued was 4%. The current annual market rate on bonds is 8%. Calculate interest expense on the bonds for the year ended December 31. year1. Round your answer to the nearest dollar. (Please note that you do not require present value tables to answer this question so their omission is deliberate.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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