Purchase Solution

Calculating bond interest expense for the year

Not what you're looking for?

Ask Custom Question

Kim Co issued $80,000 of 4% bonds on June 1, 2007 at face value. The bonds pay interest semiannually on February 1 and August 1. The bonds are dated February 1, 2006, and a mature on February 1, 2010. The total interest expense related to these bonds for the year ended December 31, 2006 is

I am stuck. The actual problem is simular but the bonds pay interest is not semiannual. Where do I start

Purchase this Solution
Solution Summary

The solution explains how to calculate the interest expense for bonds issued at par when the issue date is different from the bond date

Solution Preview

I am assuming that the bonds are issued on June 1, 2006 (it says 2007 in the question) and we are to find the interest expense till Dec ...

Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Introduction to Finance

This quiz test introductory finance topics.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

View More Free Quizzes
Related BrainMass Solutions

  • Question about Bond interest expense

    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?

  • Calculating Debt Investments

    The rest deal with the actual interest expense - which is never credited directly to the investment account; it's interest.

  • Zero Coupon Bond

    The implicit interest each year is simply the change in the bond's value for the year. Under the old rules, zero coupon bonds were more attractive because the deductions for interest expense were larger in the early years.

  • Bond Problems

    23,000 Issue of Bonds 42,000 Space for computations: Calculating the Interest Expense related to Bonds: We know that the total interest expense was 7,000.

  • Interest expense when a company issues a bond at a discount

    The journal entry for a bond discount interest payment is Interest Expense Dr Bond Discount Cr Cash Cr The interest expense will be more than the interest paid The solution explains the relationship between interest expense and bond discount using

  • Interest Expense

    The amount of bond interest expense for Year 2 is We first find the sale value of the bonds.

  • Calculating Annual Contract Rate

    Debit 2004 Jun 30 Bond Interest Expense Premium on Bonds Payable Cash Dec 31 Bond Interest Expense Premium on Bonds Payable Cash Please see the attached file.

  • Interest Expense

    The bond interest expense for Year 1 is We find the sale price of the bonds.

  • Bonds amortization of premium, bond interest expense

    Answer: c. will decrease bond interest expense. Since more cash (than the face value) is collected at the time of the issue of bond and only the face value is redeemed, amortization decreases the bond interest expense. 2.

  • Bond interest expense

    The bond interest expense for the year ended December 31, 2007, is The cash interest paid is 100,000X10%=10,000 for the year The discount on bonds is 100,000-96,000=4,000. Total year for maturity are 5. Amortization per year is 4,000/5=800.

View More Related Solutions