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On June​ 1, 2017, Smith​ & Beecham Services issued $ 36 comma 000 of 12​% bonds that mature in five years. They were issued at par. The bonds pay semiannual interest payments on June 30 and December 31 of each year. On December​ 31, 2017, how much interest is paid to​ bondholders?

Respuesta :

Answer:

Interest on 31 December 2017 = $2,160

Explanation:

The cost of bonds = $36,000

Rate of interest on bonds = 12%

Bonds are issued at par value.

Issue date of bonds = June 1 2017

Interest is paid semiannually on June 30 and 31 Dec

Interest on 30 June 2017 = [tex]36,000 \times \frac{12}{100} \times\frac{1}{12} = 360[/tex]

Interest on 31 December 2017 = [tex]36,000 \times \frac{12}{100} \times \frac{6}{12} = 2,160[/tex]

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