On January 1, 2023, Fergus Corporation issued $800,000, 10%, five-year bonds. The bond interest is payable on
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On January 1, 2023, Fergus Corporation issued $800,000, 10%, five-year bonds. The bond interest is payable on January 1 and July 1. The bonds sold for $864,887. The market rate of interest when the bonds were issued was 8%. Under the effective-interest method, the interest expense for the six months ending July 1, 2023, would be closest to.
a. $40,000.
b. $32,000.
c. $80,000.
d. $34,595
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