Question: On January 1, 2016, Sinclair Corp. bought equipment using a $10,000,000 zero-interest-bearing bond due on January 1, 2021. The prevailing rate of interest for a

On January 1, 2016, Sinclair Corp. bought equipment using a $10,000,000 zero-interest-bearing bond due on January 1, 2021. The prevailing rate of interest for a note like this on January 1, 2016 was 7%. What amount of interest expense should be included in Sinclair's 2017 income statement?

a.$499,100.00

b.$0.00

c.$534,037.00

d.$571,419.59

The answer is C, how?

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