Calculation of the total interest expense over the life of the bonds.
Stacy Company issued five-year, 10% bonds with a face value of $10,000 on January 1, 2007. Interest is paid annually on December 31. The market rate of interest on this date is 8%, and Stacy Company receives proceeds of $10,803 on the bond issuance.
Question:
What is the total interest expense over the life of the bonds cash interest payments? Premium amortization?