Question

Margot Company purchases $100,000 face amount, 6% semi-annual bonds for $110,000 when the market interest rate is 5%. Margot should recognize which interest received for the first 6-month period?

Answer 1

Answer:

$2,750

Explanation:

Calculation for what Margot should recognize the following interest revenue for the first 6-month period:

interest revenue= [$110,000 x (5% x 6/12)]

interest revenue=$2,750

Therefore what Margot should recognize as the interest revenue for the first 6-month period is $2,750