Auerbach Inc. issued 6% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $225 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 8%.

Assuming that Auerbach issued the bonds for $194,422,478, what interest expense would it recognize in its 2021 income statement? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

Multiple Choice

$3,888,450.

$7,776,899.

$0.

$4,500,000.