The Designer Company issued 10 year bonds on January 1, 2017. The 6% bonds have a face value of $800,000 and pay interest every January 1 and July 1. The bonds were sold for 690,960 based on the market interest rate of 8%. Designer uses the effective-interest method to amortize bond discounts and premiums. On July 1, 2017, Designer should record interest expense of

A. $27,638
B. $24,000
C. $48,000
D. $55,277

Answer: A. $27,638

Business

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