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Compute the amount of each interest payment

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Question - On January 2, 2014, Whitcomb Company issued $8,000,000 of their 10-year bonds at 93. The bonds have a stated rate of 4% and the semi-annual interest payments are made each June 30 and December 31. Assume that Wright uses the effective interest method of amortizing the bond discount. Pay attention!! Note that I am asking for interest expense and liability balance for the 2015 financial statements!

Required: Compute the following amounts.

Proceeds from the bond sale.

Effective interest rate (annual).

Amount of each interest payment.

Interest expense recognized for 2015.

Bond liability at December 31, 2015.

Reference no: EM132107605

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