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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Financial Accounting

ISBN: 9780136899037

13th Edition

Authors: C. William Thomas, Wendy M Tietz

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