Mole nar to y old the market inte su o S2 strat ?? Question Help terest paym nt

Question

Mole nar to y old the market inte su o S2 strat ?? Question Help terest paym nt dates a e Ja uary 1 nd July 1. The bords areas or orat on of 65% 10-year bonds. The bonds a dated and sold on J u ry 1, 2016. is$241,117Mar na d of 7%. The p oeofthe bords am untra ed ror issuance Copen tion uses the efe h in rest met d What is the amount of interest expense that McLennan Corporation will record on July 1, 2016, the first semiannual interest payment date? (All amounts rounded to the nearest dolla) O A $10,525 OB. S314 oc. S8.125 O D. $8,439 Cick to select your answer MacBook Ai P-11 10 5 9

Explanation / Answer

Interest expense = outstanding value of bonds * effective rate of interest * proportionate period

Interest expense = 241,117 * 7% * 6/12 = 8,439

Thus, option-D is correct

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