On January 1, Year 4, Jones Realty Company issued 8 percent term bonds with a face amount of $1 million due January 1, Year 14 . Interest is payable semi-annually on January 1 and July 1 . On the date of issue, investors were willing to accept an effective interest rate of 6 percent. Assume the bonds were issued on January 1, Year 4 . for $1,148,959 . Using the effective interest amortization
method, Jones Realty Company recorded interest expense for the six months ended June 30, Year 4, in the amount of
a. $40,000
b. $80,000
c. $68,938
d. $34,469
e. none of the above
D
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