Answer:
Semi-annual interest payment=$153,000
Explanation:
The interest payment on the bond is an expense which would be incurred twice a year because the terms and conditions of the bond contract is that interest be paid semi-annually, that is every six month.
This implies that we would need to work out the interest rate applicable for every six month. This is doe as follows:
Semi-annual interest rate = Annual interest rate / 2
Annual interest rate = 9%
Semi-annual interest rate = 9%/2= 4.5%
Semi-annual interest payment = Interest rate × Nominal value of Bond
Semi-annual interest payment = 4.5% × $3,400,000=$153,000
Semi-annual interest payment= $153,000
