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P11-7A Part C - 4,000,000 x 0.04 x 20 = 3,200,000 plus the...

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P11-7A C To whom this may concern: (1) The interest expense amount for 2009 is 175,830 + 176,621 which gives a total of 352,451 . (2) The interest expense reported in 2009 would be less than the amount that would be reported if straight line method was used. (3) The total cost of borrowing over the life of the bond would be to add the semiannual interest payments
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Unformatted text preview: 4,000,000 x 0.04 x 20 = 3,200,000 plus the bond discount 4,000,000 – 3,501,514 = 498,486 which gives a total cost of 3,698,486 . (4) The total bond interest expense would be the same if straight line method was used Sincerely yours, Fadi Fayad...
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