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Accounting help please please?

The Designer Company issued 10-year bonds on January 1, 2011. The 6% bonds have a face value of $800,000 and pay interest every January 1 and July 1. The bonds were sold for $690,960 based on the market interest rate of 8%. Designer uses the effective-interest method to amortize bond discounts and premiums. On July 1, 2011, Designer should record interest expense (round to the nearest dollar) of

a. $27,638

b. $24,000

c. $48,000

d. $55,277

please help me out

1 Answer

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  • Coco
    Lv 7
    8 years ago
    Favorite Answer

    a. $27,638

    ($690,960 x 8%) / 2 = $27,638

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