Ohlson Co is preparing an Excel spreadsheet for its 20 year, 4 5 , $500,000 bonds payable The bonds were issued on January 1 to yield 5 annually Interest is paid semi annually A portion of the spreadsheet appears as follows A B C D E 1 Stated rate 0 045 2 Effective rate 0 05 3 Face amount 500,000 4 Term to maturity in years 20 5 6 Period Cash Payment Interest Expense Change in Discount Outstanding Balance 7 0 8 1 9 2 What formula should Ohlson use in cell C8 to calculate interest expense for the first interest payment Multiple Choice B8 D8 E7 B3 E7 B3 2 E7 C2 2

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Question: Ohlson Co. is preparing an Excel spreadsheet for its 20-year, 4.5%, $500,000 bonds payable. The bonds were issued on January 1 to yield 5% annually.

Ohlson Co. is preparing an Excel spreadsheet for its 20-year, 4.5%, $500,000 bonds payable. The bonds were issued on January 1 to yield 5% annually. Interest is paid semi-annually. A portion of the spreadsheet appears as follows:

	A	B	C	D	E
1		Stated rate:	0.045
2		Effective rate:	0.05
3		Face amount:	500,000
4		Term to maturity in years:	20
5
6	Period	Cash Payment	Interest Expense	Change in Discount	Outstanding Balance
7	0
8	1
9	2

What formula should Ohlson use in cell C8 to calculate interest expense for the first interest payment?

Multiple Choice

=B8 D8
=E7*B3
=E7*B3/2
=E7*C2/2

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