When bonds are retired or redeemed prior to their maturity date. GAAP has been violated. The issuing company probably will report some sort of gain or loss. The issuing company probably has made a financial mistake. The issuing company is probably running short of cash. On January 1, 2013, Penland Company issued 10% bonds dated January 1, 2013, with a face amount of $40 million. The bonds mature and the end of 2022 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. What is the cash interest payment by Penland on 6/30/13? Determine the price of the bonds at January 1, 2013. For simplicity of calculations, assume the present value factor of the 20 interest payments (paid every 6 months), at a semi-annual effective interest rate of 6%, is 12.0, and 2) the present value factor of the bonds at maturity (20 semi-annual periods out) at a semi-annual effective interest rate of 6%, is .30. Using the effective interest method, what is the interest expense recorded by Penland on 6/30/13