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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

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.

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