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What is the semi-annual cash interest payment on the bonds

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Reference no: EM132607267

Barclay Company issues $400,000 of 6% bonds that pay interest semiannually and mature in 10 years.

  • The bonds' market interest rate at issuance or effective interest rate is 8% per year compounded semiannually
  • The company uses the effective interest rate method to amortize bond premia or discounts and to calculate interest expense

Question 1: What is the semi-annual cash interest payment on the bonds?

a. $12,000

b. $16,000

c. $32,000

d. $24,000

Question 2: What is the interest expense at the end of the first 6 months for the bonds, if the bonds were issued at $345,639?

a. $10,369

b. $12,000

c. $16,000

d. $13,826

Reference no: EM132607267

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