On January 1, 2018, Fox Co. issued $400,000, 12%, 2-year bonds that pay interest semi-annually, July 1, and January 1. When issued, investors required 6% interest, and the bonds are due January 1, 2020. Using the effective interest method, what is the bond interest expense that Fox Co. will show on its income statement for the year ending 12/31/2019?

Use the appropriate present value factors below to answer this Question:

Present Value FactorsTable2%3%4%6%12%

Single sum-2 periods.96117 .94260 .92456 .89000 .79719

Single sum-4 periods.92385 .88849 .85480 .79209 .63552

Ordinary annuity-2 periods1.94156 1.91347 1.88609 1.83339 1.69005

Ordinary annuity-4 periods3.80773 3.71710 3.62990 3.46511 3.03735

Annuity due-2 periods1.98039 1.97087 1.96154 1.94340 1.89286

Annuity due-4 periods3.88388 3.82861 3.77509 3.67301 3.40183

$26,357

$22,962

$25,039

$24,000