Question: Lesp Industries issues five-year bonds dated 1 January 2015 with a face value of $3,000, 000 and 3% coupon rate paid annually on 31 December.

Lesp Industries issues five-year bonds dated 1 January 2015 with a face value of $3,000, 000 and 3% coupon rate paid annually on 31 December. The market interest rate on bonds of comparable risk and term is 4%. The sales proceeds of the bonds are $1,910,964.

Under the effective interest rate method, what is the interest expense in 2017?

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