A Company Issues $5,000,000, 7

question 18

Multiple Choice

A company issues $5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2010.Interest is paid on June 30 and December 31.The proceeds from the bonds are $4,901,036.Using effective-interest amortization, how much interest expense will be recognized in 2010?

• A)$195,000
• B)$390,000
• C)$392,124
• D)$392,083