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% effective (market) interest rate. Assuming the effective-interest method of amortization is used, the interest expense for the six-month period ending December 31, 2014 is closest to:

A) $24,000.
B) $20,491.
C) $20,000.
D) $20,825.