Find amount of interest expense pertaining to the bond

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Benton Ltd., which reports under IFRS and has a year-end of December 31, issued a bond with a maturity amount or par value of $400,000 at a price of 99 on January 1, 20X1. When issued, the bond had a stated interest rate of 5%, while the market interest rate at that time was 6%. The bonds pay interest annually on January 1, commencing on January 1, 20X2. In the blank boxes below, please provide the amounts asked for in each of the following questions in this order (when entering amounts please do not use commas, negative signs, dollar signs or cents - please round your answer to the nearest dollar).

Problem 1: The amount of interest expense pertaining to the bond that the company will report on its income statement for the year ending December 31, 20X1.

Problem 2: The amount of interest payable pertaining to the bond that the company will report on its statement of financial position for the year ending December 31, 20X1.

Reference no: EM132662838

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