Effective Interest Amortization of Bond Premium or Discount

11. Long Term Liabilities / Effective Interest Amortization of Bond Premium or Discount / Problem 4

Problem 4

What is the cash interest payment for a bond with a principal amount of \$80,000 and a stated interest rate of 5% paid annually?

\$4,000

\$3,500

\$4,500

\$5,000