[The Following Information Applies to the Questions Displayed Below

question 38

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, Weller Company issued bonds with a $400,000 face value, a stated rate of interest of 10%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8%. Interest is paid annually on December 31.

-Assuming Weller issued the bond for $431,940,what is the amount of interest expense that will be recognized during Year 3?

• A)$33,649
• B)$20,000
• C)$34,120
• D)$46,350

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