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On January 1, 2018, Quinton Corporation issued 8% bonds with a face value of $100,000. The bonds are sold for $98,000. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, 2022. Quinton Corporation records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31, 2018, is a.$8,400. b.$7,600. c.$8,000. d.$8,200.

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Karabo99

Answer:

a.$8,400

Explanation:

Amortization of bonds discount = (100000 - 98000)/5years  

                                                     = 2000/5

                                                     = 400

Interest expenses = interst on face value + amortization of bond discount

                             = (100000*8%) + 400  

                             = $8400

Therefore, The bond interest expense for the year ended December 31, 2018, is $8400.

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