Mcdonaugh Corporation issued $250,000 of 5%, 10-year bonds payable on January 1, 2019. The market interest rate

Question:

Mcdonaugh Corporation issued $250,000 of 5%, 10-year bonds payable on January 1, 2019. The market interest rate when the bonds were issued was 8%. Interest is paid semiannually on January 1 and July 1. The first interest payment is July 1, 2019. Using the effective-interest amortization method, how much interest expense will Mcdonaugh record on July 1, 2019? Use Excel to calculate the issue price.

a. $4,976

b. $7,961

c. $1,711

d. $10,000

e. $6,250

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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