Hocker Company issues $200,000 of ten-year, 8% bonds to yield 10% on January 1, 20X1. The bonds pay interest annually on December 31. The bonds were sold at a discount of $24,578. The amount of bond interest expense for 20X2 is:

• $16,000.

• $17,696.

• $18,458.

• $19,280.

Hocker Company issues $200,000 of ten-year, 8% bonds to yield 10% on January 1, 20X1. The bonds pay interest annually on December 31. The bonds were sold at a discount of $24,578.

The bond carrying value at the end of 20X2 is:

• $175,422.

• $178,660.

• $200,000.

• $203,238.