Soap & Pumice: Soap Company Issued $200,000 of 8%, 5-Year

Multiple Choice

Soap & Pumice: Soap Company issued $200,000 of 8%, 5-year bonds on January 1, 20X6. The discount on issuance was $12,000. Bond interest is paid annually on December 31. On December 31, 20X8, Pumice Company purchased one-half of the outstanding bonds for $96,000. Both companies use the straight-line method of amortization.
-Refer to Soap & Pumice. How much interest expense will appear on the December 31, 20X9, consolidated income statement?

A) $18,400
B) $16,000
C) $9,200
D) $8,000