Multiple Choice Question

On January $1,$ Year $1,$ Ocean Enterprises issued bonds with a face value of $$60,000,$ a stated rate of interest of $8\%$ and a five$-$year term. The effective interest rate

at the time of issue was $9\%,$ so the bonds sold for $$57,666.$ Assuming Ocean Enterprises uses the effective interest rate method to amortize the bond discount,

calculate the Year $1$ interest expense.

$$5,190$

$$4,613$

$$4,800$

$$5,600$

Need help? Review these concept resources.

$$ Read About the Concept