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A $100,000 10 year, 7% bond that pays interest semiannually on June 30 and December 31 is issued to yield 6.0% on January 1, 2020.

A $100,000 10 year, 7% bond that pays interest semiannually on June 30 and December 31 is issued to yield 6.0% on January 1, 2020. The proceeds from the bond are $107,439. Using effective interest amortization, how much interest expense will be recognized in 2020?

a) $0

b) $7,000

c) $6,438

d) $6,000

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