On January 1, 2011, Matlock, Inc. issued its 10 percent bonds with a face amount...
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On January 1, 2011, Matlock, Inc. issued its 10 percent bonds with a face amount of $1,500,000. The bonds mature on January 1, 2021. The bonds were issued for $1,329,000 to yield 12 percent, resulting in a bond discount of $171,000. Matlock uses the effective-interest method to amortize bond discounts. Interest is payable on July 1 and January 1. For the six months ended, June 31, 2011, Matlock should report bond interest expense of:
$75,000
$79,740
$83,550
$85,260
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