On January 1, a Company Issues Bonds Dated January 1

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The amount of interest expense each semi-annual period using straight-line amortization is:

A) $14,000.00.
B) $28,000.00.
C) $17,620.70.
D) $31,241.40.
E) $15,620.70.