On January 1, 20X8, Glen Allen Company issued $200,000 in term bonds with a 5-year term. The stated rate of interest was 6% and the effective rate of interest was 7%. What is the amount of interest expense to be recorded on December 31, 20X8?

The answer is $13,425.97

Explanation:

The answer is $13,425.97

Using Financial calculator (TEXAS BA II PLUS)

N = 5 years

i = 7 percent

FV = $200,000

PMT = $12,000

PV = $191,799.61

Therefore interest expense is $191,799.61 x 7%

= $13,425.97

answer; /// i do believe the correct answer is (possession utility);

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy