- Plum Corporation issues $200,000 of 5 percent, five-year bonds on January 1, 20x5, at 90. The market interest rate is 6%. The bond indenture states that interest is to be paid on January 1 and July 1 of each year. Using effective interest method, what is the interest expense on July 1, 20x5? (Please show your computation in the blank space between #9 and #10 before you select the answer choice)