Answer:
Interest on 31 December 2017 = $2,160
Explanation:
The cost of bonds = $36,000
Rate of interest on bonds = 12%
Bonds are issued at par value.
Issue date of bonds = June 1 2017
Interest is paid semiannually on June 30 and 31 Dec
Interest on 30 June 2017 = [tex]36,000 \times \frac{12}{100} \times\frac{1}{12} = 360[/tex]
Interest on 31 December 2017 = [tex]36,000 \times \frac{12}{100} \times \frac{6}{12} = 2,160[/tex]
