On January 1, 2016, Drennen, Inc., issued $2.6 million face amount of 9-year, 10% stated rate bonds when market interest rates were 8%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2024. Table 6-4, Table 6-5.

A. Calculate the proceeds (issue price) of Drennen, Inc.'s, bonds on January 1, 2016, assuming that the bonds were sold to provide a market rate of return to the investor. (Round PV factor to 4 decimal places.)

B. Assume instead that the proceeds were $2,561,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2016, assuming that the discount of $39,000 is amortized on a straight-line basis. (Use amounts with + for increases and amounts with for decreases.)

C. Assume instead that the proceeds were $2,561,000. Record the journal entry to show the payment of semiannual interest and the related discount amortization on June 30, 2016, assuming that the discount of $39,000 is amortized on a straight-line basis. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

D. If the discount in part b were amortized using the compound interest method, would interest expense for the year ended December 31, 2016, be more than, less than, or equal to the interest expense reported using the straight-line method of discount amortization?

a.Interest expense will be the same.

b. interest expense will be less.

c. Interest expense will be more