The Designer Company issued 10-year bonds on January 1, 2011. The 6% bonds have a face value of $762,000 and pay interest every January 1 and July 1. The bonds were sold for $633,306 based on the market interest rate of 7%. Designer uses the effective-interest method to amortize bond discounts and premiums. What amount of interest expense should Designer record on July 1, 2011 (rounded to the nearest dollar)?

Select the correct answer.

a) $22,166

b) $22,860

c) $26,670

d) $18,999

Answer rating: 100% (QA)

The company pays interest every January 1 and July 1 so ... View the full answer