denver company issued bonds with a face value of 100,000 and stated interest rate of 8%. the bonds have a life of five years and were sold at 102 1/2. if denver amoritizes discounts and premiums using the straight line method, the amount of interest expense each full year would be

$7,500

Explanation:

Calculation for the amount of interest expense each full year

First step is to calculate the the annual interest

Annual interest =$ 8,000

($100,000*8%)

Second step is to calculate the premium paid

Premium paid=$ 2,500

($ 100,000 * 2.5%)

Third step is to calculate the Amortization of premium

Amortization of premium=$500

( $2,500 / 5years )

Last step is to calculate the interest expenses using this formula

Interest expenses=Annual interest-Amortization of premium

Let plug in the formula

Interest expenses ($8,000 - $500 )

Interest expenses= $ 7,500

Therefore the amount of interest expenses each full year would be $7,500

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lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o