Chapter 8
Non-Current Liabilities
390
Analysis
If, after the issuance date, the market interest rate increases to 7%, how does this impact
the interest expenses? Explain the impact the change in market interest rate has from the
perspective of the company and of the investor.
AP-2A (
3
)
On September 1, 2016, Delia Company issued $264,000 worth of bonds, with an interest rate
of 10% per annum. The bonds will mature on August 31, 2019. Interest will be paid annually on
August 31. The company has a December 31 year‐end.
Calculate the accrued interest payable on December 31, 2016.
