Amortize discount by intest method. On the first day of uts fuscal year, Ebert company issued $$26,000,000$ of $5$ year, $9\%$ bonds to finance its opperations. Interest is payable seniannualy$.$The bonds were issued at a market $($effective$)$ interest rate of $11\%,$ resulting in eberr recieving cash of $$24,040,207.$ The company uses the interest method.

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As the discount or premium is amortized, the carrying amount of the bond changes. As a result, Interest expense also changes each period.

b$.$ Compute the amount of the bond interest expense for the first year. Round to the nearest dollar.

Annual interest paid

Discount amortized

Interest expense for first year

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To find the interest expense either add any discount amortized or subtract any premium amortized to cash paid to the bondholders.