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Compute interest expense for the semi-annual period

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On January 1, 2013 the Mack Company issues $16,000,000 of 11% bonds dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. The issue price of the bonds was $16,517,057.02 with no bond issue cost.

Using the effective interest method, how much interest expense should be recognized for the period ending June 30, 2013?

Compute interest expense for the semi-annual period ending December 31, 2015.

Suppose that instead of the effective interest method, the straight line method was used. How much interest expense would be recognized in each period?

Reference no: EM131810557

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