Calculate the interest expense on the bonds

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Question - Barney Inc has a December 31 fiscal year. On feb1, year 1, Barney Inc issued. Bonds that pay interest on July 31 and January 31. The bonds were issued for $110000. The bonds have a face value of $82000. The bonds pay interest at an annual interest rate of 9%. The annual market rate on the bonds at the time they were issued at was 4%. The current annual market rate on bonds is 4%. Calculate the interest expense on the bonds for the year ended Dec 31, year 1.

Reference no: EM133077328

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