The following refers to a purchase of a machine by a company on January 1, 2015.

Contract Price: $80,000 Interest Rate: 6%

Contract Price Due On: December 31, 2017 Interest Compounded: semi-annually

The entry to record the purchase of the machine would include a:

	A.	debit to machine for $80,000
	B.	credit to note payable for $66,960
	C.	debit to interest expense for 12,800
	D.	debit to discount for $13,040
	E.	debit to machine for $122,135

Determine interest expense to be recorded on December 31, 2015.

	A.	$2,069
	B.	$4,258
	C.	$4,258
	D.	$2,173
	E.	$4,274