A company issued 8.5%, 5-year bonds with a par value of $260,000. The market rate when the bonds were issued was 9.0%. The company received $254,856.73 cash for the bonds. Using the effective interest method, the amount of interest expense for the second semiannual interest period is:
A. $22,955.94.
B. $11,468.55.
C. $22,100.00.
D. $11,487.39.
E. $11,050.00.
Answer: D
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