Sunny Day Company sells $ 300,000 of 12 % , 10 - year bonds for 74.8367 on April 1 , 2021. The market rate of interest on that day is 17.5 % . Interest is paid each year on April 1. The issue price of the bond is $ 224,510 . Sunny Day Company uses the straight - line amortization method . The amount of interest expense for each year will be