In 2008, Drew Company issued $200,000 of bonds for $189,640. If the stated rate of interest was 8 percent and the yield was 6.73 percent, how would Drew calculate the interest expense for the first year on the bonds using the effective interest method?

a. $189,640 3 6.73%

b. $189,640 3 8%

c. $10,000 3 6.73%

d. $10,000 3 8%