Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Join our Q&A platform to get precise answers from experts in diverse fields and enhance your understanding. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

A company issues $60,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If the issuer accepts $62,000 for the bonds, the premium on bonds payable will (increase/decrease) total interest expense recognized over the life of the bond by $ .

Sagot :

Tundexi

Answer:

Decrease, $2,000

Explanation:

The premium on bonds payable will decrease total interest expense recognized over the life of the bond by $2,000. The difference between the face value & the issue value $2,000 ($62,000 - $60,000) should be amortize over a period of time and of which is reduced from interest expense.

Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.