On July 31, 2018, Snowday Corporation issued $100,000, 5%, 20-year bonds for $88,443 when the...
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On July 31, 2018, Snowday Corporation issued $100,000, 5%, 20-year bonds for $88,443 when the market interest rate was 6%. The bonds pay semi-annual interest on July 31 and January 31. Snowday uses the straight-line method to amortize its bond discount or premium, and it has a January 31 year-end. How much would interest expense from these bonds be recorded in Snowdays financial statements for the year ended January 31, 2019?
a. $2,788.93
b. $5,000
c. $5,577.85
d. $2,500
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