On January 1, 2018, Topo Co. issued $1,000,000 in bonds payable. The bonds pay 4% interest...

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On January 1, 2018, Topo Co. issued $1,000,000 in bonds payable. The bonds pay 4% interest semi-annually (i.e. 8% annual percentage rate) on July 1 and January 1, and they mature in 10 years. At the date of issue, Topo received $875,378, which implies a 5% semi-annual effective interest rate. What is the total amount of interest expense for 2018 (closest to)? 中 21. а. $70,030 b. $80,000 C. $87,538 d. $87,726 On January 1, 2018, Topo Co. issued $1,000,000 in bonds payable. The bonds pay 4% interest semi-annually (i.e. 8% annual percentage rate) on July 1 and January 1, and they mature in 10 years. At the date of issue, Topo received $875,378, which implies a 5% semi-annual effective interest rate. What is the total amount of interest expense for 2018 (closest to)? 中 21. а. $70,030 b. $80,000 C. $87,538 d. $87,726

Answer rating: 100% (QA)

Answer d The bond is issued at discount because the receiving amount is l... View the full answer