Jones Company issued bonds with a $160,000 face value on January 1, Year 1. The five-year term bonds were issued at 97 and had a 8.50% stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information: What is the amount of interest expense shown on Jones's December 31, Year 1 income statement?

Jones Company issued bonds with a $160,000 face value on January 1, Year 1. The five-year term bonds were issued at 97 and had a 8.50% stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information: What is the amount of interest expense shown on Jones's December 31, Year 1 income statement?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 15MCQ

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