Question

Coronado Industries received proceeds of $122200 on 10-year, 6% bonds issued on January 1, 2020. The bonds had a face value of $130000, pay interest annually on December 31, and have a call price of 101. Coronado uses the straight-line method of amortization. What is the amount of interest Coronado must pay the bondholders in 2020

Answer 1

$7,800

Step-by-step explanation:

Calculation to determine the amount of interest Coronado must pay the bondholders in 2020

Using this formula

Interest=Bonds issued percentage*Bonds face value

Let plug in the formula

Interest=6%*$130,000

Interest=$7,800

Therefore the amount of interest Coronado must pay the bondholders in 2020 is $7,800