Schlitterbahn Waterslide Company issued 26,000, 10-year, 4%, $100 bonds on January 1 at face...

Question:

Schlitterbahn Waterslide Company issued 26,000, 10-year, 4%, $100 bonds on January 1 at face value. Interest is payable each December 31.

Bond Payable:

The bond payable is a liability fo the company. A bond payable requires to pay the interest at a fixed rate at the stated date. The interest is charged as an expense.

Answer and Explanation:

The Interest payable each December 31 is $104,000.

Explanation: The Interest payable each December 31 is $104,000 ($100 x 26,000 x 4%).


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How to Calculate Interest Expense: Formula & Example

from Financial Accounting: Help and Review

Chapter 5 / Lesson 18
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