A Company Issued 10-Year, 7% Bonds with a Par Value

Multiple Choice

A company issued 10-year, 7% bonds with a par value of $100,000. The company received $96,526 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is:

A) $7,347.40.
B) $3,500.00.
C) $3,673.70.
D) $7,000.00.
E) $3,326.00.