Auerbach Inc. issued 4% bonds on October 1, 2018. The bonds have a maturity date of September 30, 2028 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2019. The effective interest rate established by the market was 6%.

How much cash interest does Auerbach pay on March 31, 2019?

A) $6.0 million.

B) $12.0 million.

C) $9.0 million.

D) $18.0 million.

Assuming that Auerbach issued the bonds for $255,369,000, what interest expense would it recognize in its 2018 income statement?

A) $0.

B) $3,830,535.

C) $5,107,380.

D) $7,661,070.