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On January 2, 2017, Garage Master Construction, Inc. issued $500,000, ten-year bonds for $574,540. The bonds pay interest on June 30 and December 31. The

On January 2, 2017, Garage Master Construction, Inc. issued $500,000, ten-year bonds for $574,540. The bonds pay interest on June 30 and December 31. The face rate is 8% and the market rate is 6%. The interest expense on the bonds at June 30, 2017, is

a.$17,236.

b.$20,000.

c.$2,764.

d.$22,764.

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