On January 1, 2019, French Company issued $86,000 of five-year, 8% bonds when the market interest rate was 12%. The issue price of the bonds was $66,000. French uses the effective-interest method of amortization for bond discount. Semiannual interest payments are made on June 30 and December 31 of each year. How much interest expense will be recorded when the first interest payment is made? (Round your answer to the nearest dollar number.) OA. $5.160 OB. $3.960 O C. $2,640 OD. $3.440
Expert Answer
1)correct option is “B” -3960
Interest expense = 66000*.12*6/12 = 3960
2)correct option is A:
weighted average cost
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