Question about Bond interest expense
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ON January 1, 2007 the Queen Corporation issued 10% bonds with a face value of $100,000. The bonds are sold for $98,000. THe bonds pay interest semianuually on June 30 and December 31 and the maturity date is December 31, 2011. Queen records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31,2007 is?
My calculation is $$9,800... but I am not sure. Everytime when I am calculating I am getting different amount. Please show me the steps. Thank you.
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The solution explains how to calculate the bond interest expense.
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The discount on bonds is 100,000-98,000=2,000. The number of periods till maturity is 5 years X 2 for semi annual ...
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