On January 1, 2021, Tiny Tim Industries had outstanding $1,000,000 of 10% bonds with a book value of $968,500. The indenture specified a call price of $985,000. The bonds were issued previously at a price to yield 12% and interest payable semi-annually on July 1 and January 1. Tiny Tim called the bonds (retired them) on July 1, 2021. What is the amount of the loss on early extinguishment?

• A) $0.

• B) $8,032.

• C) $8,110.

• D) $8,390.

Auerbach Inc. issued 8% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $250 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 10%. Assuming that Auerbach issued the bonds for $218,844,600, what interest expense would it recognize in its 2021 income statement? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

• A) 6,250,000.

• B) $10,942,230.

• C) $0.

• D) $5,471,115.