Reference no: EM133031917

Problem - On March 1, Wag City issued $1,000,000, 10-year, 6% general obligation bonds at par with no bond issue costs. The bonds pay interest September 1 and March 1. What amount of interest expense and bond interest payable should Wag report in its government-wide financial statements at the close of the fiscal year on December 31?

a. Interest expense, $50,000; interest payable, $0.

b. Interest expense, $50,000; interest payable, $20,000.

c. Interest expense, $60,000; interest payable, $10,000.

d. Interest expense, $30,000; interest payable, $0.