[The Following Information Applies to the Questions Displayed Below

Multiple Choice

[The following information applies to the questions displayed below.]

On January 1, Year 1, Weller Company issued bonds with a $400,000 face value, a stated rate of interest of 10%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8%. Interest is paid annually on December 31.

-Assuming Weller issued the bond for $431,940,what is the amount of interest expense that will be recognized during Year 3?

A) $33,649
B) $20,000
C) $34,120
D) $46,350