On January 1, 2016, a company issued $400,700 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $414,903 based on a 10% market interest rate. The effective-interest method of amortization is used. Rounding all calculations to the nearest whole dollar, what is the interest expense for the six-month period ending June 30, 2016?

$24,042.

$24,894.

$20,745.

$20,035.

On January 1, 2016, Tonika Company issued a seven-year, $10,000, 10% bond. The interest is payable annually each December 31. The issue price was $9,529 based on an 11% effective interest rate. Tonika uses the effective-interest amortization method.

The 2017 interest expense is closest to:

$953.

$1,000.

$958.

$1,053.

A Company retired $520,000 of bonds, which have an unamortized discount of $12,000, by repurchasing them for $520,000. What is the amount of the gain or loss on the retirement of the bonds?

There was a $12,000 loss.

There was a $12,000 gain.

There was no gain or loss.

There was a $520,000 loss.