On january 1, 2016, a company issued $400,000 of 10-year, 12% bonds. the interest is payable semi-annually on june 30 and december 31. the issue price was $413,153 based on a 10% market interest rate. the effective-interest method of amortization is used. rounding all calculations to nearest whole dollar, what is the interest expense for the six-month period ending june 30, 2016?
a. $24,000.
b. $24,789.
c. $20,000.
d. $20,658.

d. $20,658.

Explanation:

The computation of the interest expense for the six months is shown below:

= Issue price × market rate of interest × number of months ÷ (total number of months in a year)

= $413,153 × 10% × (6 months ÷ 12 months)

= 20658

The six months is computed from On January 1, 2016 to June 30, 2016

We simply apply the formula so that the accurate value can come.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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