On January 1, Charlie Corporation Issued $3,000,000, 14%, 5-Year Bonds

question 122

Multiple Choice

On January 1, Charlie Corporation issued $3,000,000, 14%, 5-year bonds with interest payable on January 1 and July 1. The bonds sold for $3,216,288. The market rate of interest for these bonds was 12%. Under the effective-interest method, the debit entry to interest expense on July 1 is for (rounded to the nearest dollar) :

• A) $180,000.
• B) $188,237.
• C) $192,978.
• D) $210,000.

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