Jep Corporation issued 5%, 10-year bonds with a face value of 500,000 at 108 (a 4% yield) on October 1, 2019. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on an effective-interest basis. (Two questions are based on this information.) Bond interest expense reported on the December 31, 2019 income statement of Jep Corporation would be

Select one:

a. 10,800.

b. 6,250.

c. 5,400.

d. 6,750.

e. None of these answers.