Grant Inc. issued $400,000 of 8% bonds on June 30, 2020. The bonds mature in 10 years. For bonds of similar risk and maturity, the market interest rate is 6%. Interest is paid semiannually on December 31 and June 30. (i.e., the first interest payment will be made on December 31, 2020). For all computations, round the nearest dollar.

Table II Present Value of a Single Payment

n/i	3.00%	4.00%	5.00%	6.00%	8.00%	10.00%
10	0.7441	0.6756	0.6139	0.5584	0.4632	0.3855
20	0.5537	0.4564	0.3769	0.3118	0.2146	0.1486
40	0.3066	0.2083	0.1421	0.0972	0.0460	0.0221

Table IV Present Value of an Ordinary Annuity

n/i	3.00%	4.00%	5.00%	6.00%	8.00%	10.00%
10	8.5302	8.1109	7.7217	7.3601	6.7101	6.1446
20	14.8775	13.5903	12.4622	11.4699	9.8182	8.5136
40	23.1148	19.7928	17.1591	15.0463	11.9246	9.7791

How much interest expense will be recognized on December 31, 2020?

A.

$16,750

B.

$17,490

C.

$13,320

The entry to record the extinguishment on April 1, 2021, will include a

	A.	debit of $28,755 to Loss on Bond Extinguishment.
	B.	credit of $41,754 to Discount on Bonds Payable.
	C.	credit of $24,166 to Gain on Bond Extinguishment.
	D.	debit of $47,863 to Premium on Bonds Payable.

D.

$13,786