How do I find total Bond Interest Expense?
Jules issues 6.0%, five-year bonds dated January 1, 2009, with a $ 230,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $ 235,750. The annual market rate is 5.5% on the issue date.
What is the total Bond Interest Expense?
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Answer by tjfinvestor
Hi Joann, the interest expense is based on the face value of the bond (par value of $ 230,000) and the bond interest rate. The total bond interest expense over the life of the bond is the stated bond rate of return 6% * the face value * five years. All the other stuff is unrelated to the question.
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