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A company issued 5-year, 7% bonds with a par value of $100,000. the market rate when the bonds were issued was 6.5%. the company received $102,105 cash for the bonds. using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is: multiple choice $1,750.00. $3,318.41. $3,500.00. $6,573.90. $7,000.00.

Respuesta :

popalabdulqayou
$102,105-$100,000= $2105

$2105/10 =$210.5

1000*.07*.5= $3500

3500- 210.5 = $3289.5

So in my estimation, it is $3,318.41

The amount for the first semiannual interest period is:   $3,318.41.

What is semiannual rate of interest?

The semi-annual rate is the simple annual hobby quotation for compounding twice a year. Coupon charges on bonds paying hobby twice per yr are commonly expressed as semi-annual prices. This makes prices broadly comparable, even as also allowing the amounts of constant hobby coupons to be decided effortlessly.

Semiannual is an adjective that describes something that is paid, pronounced, published, or otherwise takes area twice every 12 months, normally as soon as every six months.

expalnation;

Time = 5 years

bond interest rate = 7%

parvalue = $100,00

market rate whwn the bond were issued = 6.5%

Amount received by the company = $102,105

$102,105-$100,000= $2105

$2105/10 =$210.5

1000*.07*.5= $3500

the amount for the first semiannual period = 3500- 210.5 = $3289.5

Therefore, the first semiannual interest period is:   $3,318.41.

Learn more about semiannual interest method here:-https://brainly.com/question/15069646

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