Straight-line method both to determine interest expense

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Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2011. Transaction costs were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2012), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.

Reference no: EM13153387

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