Question: A company issues $ 1 6 , 2 0 0 , 0 0 0 , 5 . 8 % , 2 0 - year bonds

A company issues $16,200,000,5.8%,20-year bonds to yield 6% on January 1, Year 7. Interest is paid on
June 30 and December 31. The proceeds from the bonds are $15,825,541. Using effective-interest
amortization, how much interest expense will be recognized in Year 7? What will the carrying value of
the bonds be on the December 31, Year 7 balance sheet?

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