Answer:
$8,000
Explanation:
The computation of the total interest expense is shown below:
On June 30
= Face value × rate of interest × number of months ÷ (total number of months in a year)
= $100,000 × 8% × (6 months ÷ 12 months)
= $4,000
The 6 months is calculated from January 1 to June 30
On December 31
= Face value × rate of interest × number of months ÷ (total number of months in a year)
= $100,000 × 8% × (6 months ÷ 12 months)
= $4,000
The 6 months is calculated from June 30 to December 31
So, the total interest expense would be
= $4,000 + $4,000
= $8,000
