A company issued 7%, 5-year bonds with a par value of $100,000. The market rate when the bonds were issued was 7.5%. The company received $97,947 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:
A. $3,705.30.
B. $3,500.00.
C. $3,673.01.
D. $7,346.03.
E. $7,000.00.
Answer: C
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