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The Marx Company issued $82,000 of 12% bonds on April 1 of the current year at face value. The bonds pay interest semiannually on January 1 and July 1. The bonds are dated January 1, and mature in five years, on January 1. Determine the total interest expense related to these bonds for the current year ending on December 31.a. $8,580
b. $6,435
c. $4,290
d. $715

Respuesta :

Answer:

$7,380

Explanation:

The computation of the interest expense is shown below:

= Issued value of the bond × rate of interest × number of months ÷ total number of months in a year

= $82,000 × 12% × 9 months ÷ 12 months

= $7,380

Note: This is the answer but the same is not mentioned in the given options.

Basically we multiplied the issued value with the interest rate and the time period in months

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