On January 1, 2014, a Corporation Issued $400,000 of 10-Year

Multiple Choice

On January 1, 2014, a corporation issued $400,000 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $413,153 based on a 10% market interest rate. Assuming the effective-interest method of amortization is used, and rounding all calculations to the nearest whole dollar, what is the interest expense for the six-month period ending June 30, 2014?

A) $24,000.
B) $24,789.
C) $20,000.
D) $20,658.