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Turner Company issued $300,000 of 6%, 5-year bonds at 98.
Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

a. $18,000

b. $9,000

c. $18,600

d. $19,200

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Answer:

d. $19,200

Explanation:

Turner Company issued $300,000 of 6%, 5-year bonds at 98. Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?.

=($300,000 x 6% plus $6,000/5)

Therefore the correct answer is d)$19,200