Sinto Bem Company issues a two-year note paying 5 percent interest on January 1, Year 1. The
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Sinto Bem Company issues a two-year note paying 5 percent interest on January 1, Year 1. The note sells for its par value of $1,000,000, and the company incurs issuance costs of $22,000. Which of the following amounts best approximates the amount of interest expense Sinto Bem will recognize in Year 1 related to this note?
a. $48,900.
b. $50,000.
c. $58,680.
d. $60,670.
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