Trego Company issued, on December 31, 2018, $1,000,000 face value, 4%, 5-year bonds. Interest will be...

Trego Company issued, on December 31, 2018, $1,000,000 face value, 4%, 5-year bonds. Interest will be paid semiannually each June 30 and December 31. The bonds sold at a price of 102; Trego uses the straight-line method of amortizing bond discount or premium. The amount of bond interest expense recognized by Trego Company in 2019 with respect to these bonds is

Expert Solution

Bond issue price	1020000	=1000000*1.02
Premium on issue	20000	=1020000-1000000

Cash interest paid in 2019	40000	=1000000*4%
Less: Premium amortized in 2019	4000	=20000/5
Interest expense recognized in 2019	36000

ekkarill92 answered 2 years ago

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Trego Company issued, on December 31, 2018, $1,000,000 face value, 4%, 5-year bonds. Interest will be...

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