On January 1,2014,Naperville Corporation Issued $2,000,000,14%,5-Year Bonds with Interest Payable

question 7

Multiple Choice

On January 1,2014,Naperville Corporation issued $2,000,000,14%,5-year bonds with interest payable on January 1 and July 1.The bonds sold for $2,146,400.The market rate of interest was 12%.Using the effective-interest method,the debit entry to interest expense on July 1,2014 is (round to the nearest dollar) :

• A)$120,000.
• B)$125,360.
• C)$128,784.
• D)$140,000.

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