Question

On january 1st, 2014, brenner company purchased at face value, a $1,000, 6% bond that pays interest on january 1st and july 1st. brenner company has a calendar year end. the entry for the receipt of interest on july 1st, 2014, is

Answer 1

In this case the company purchased at face value, at $ 1,000, 6% bond that pays interest on January 1 and July 1, that is, half a year. Therefore, the correct answer in this case will be:(1,000) * (0.06) * (1/2) = $ 30