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On January 1, 2018, Legion Company sold $200,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $177,000, priced to yield 12%. Legion records
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On January 1, 2018, Legion Company sold $200,000 of 10% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $177,000, priced to yield 12%. Legion records interest at the effective rate. Legion should pay cash interest for the six months ended June 30, 2018, in the amount of:a. $10,000.

b. $12,000.
c. $10,620.
d. $8,850.

User William Patton
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5 votes

Answer:

Correct option is A $10,000

Step-by-step explanation:

10% × ½ × $200,000 = $10,000.

User Jason Awbrey
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