On January 2, 2014, Muslin Ltd. sold five year, 8% bonds with a face value of $900,000 Interest will be paid semi-annually on June 30 and December 31. The bonds were sold for $830,400 to yield 10%. Using the effective interest method of amortization of bond discount or premium, interest expense for 2014 is

a. $72,000.

b. $83,040.

c. $83,316.

d. $90,000

Answer rating: 100% (QA)

The answer is C 83316 The way to calculate this is to take the face value of the bonds 900000 and mu... View the full answer