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On July 1 the Stanley Corporation issues $2,000,000 of 10year, 7.5% bonds dated July 1 at 91 when the market rate of interest is 9%.
On July 1 the Stanley Corporation issues $2,000,000 of 10year, 7.5% bonds dated July 1 at 91 when the market
rate of interest is 9%. Stanley Corporation uses the straightline method of amortization. Interest is paid each June
30 and December 31. The interest expense recognized for the first semiannual interest payment on December 31 is:
A. $180,000.
B. $75,000.
C. $84,000.
D. $9,000.
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