On January 1, Cleopatra Corporation issued $2,000,000, 14%, 5-year bonds with interest payable on December 31. The bonds sold for $2,144,192. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Bond Interest Expense is for

a. $240,000.
b. $251,162.
c. $257,304.
d. $280,000.

Answer: c. $257,304.

Business

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