Answer:
The bond interest expense for the year ended December 31, of the first year is $5,650
Step-by-step explanation:
We will need to calculate the total annual interest expense on the bond which we are given as 10% of the face value. We will then divide the total interest on the bond by 2 because the pays semi-annual interest.
Total interest expense on the bond will therefore be ; 10% × $113,000
= $11,300
Semi-annual interest expense will now be ;
= $11,300/2
= $5,650