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What amount should the issuing company report

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Question - On April 1st of the current fiscal year, a publicly-traded company issued 2,000 bonds each with a maturity value of $10,000 for a total maturity value of $20,000,000. They received a total of $18,600,000. Every bond sold for the same price. The stated annual interest rate for the bonds is 4% and interest is to be paid semi-annually on September 30th and March 31st. The bonds mature 10 years from the issue date. The issuing company uses the straight-line method of amortization and their fiscal year ends on December 31st.

Required - In financial statements issued as of December 31st, the close of the fiscal year in which the bonds were issued, what amount should the issuing company report as accrued interest payable on behalf of the bonds?

Reference no: EM133121458

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