On January 1, 2019, Commercial Equipment Sales issued $28,000 in bonds for $15,700. These are six-year bonds with a stated interest rate of 10%, and pay semiannual interest on June 30 and December 31. Commercial Equipment Sales uses the straight-line method to amortize the Bond Discount. What amount is debited to Interest Expense on June 30, 2019?
A) $1400
B) $2425
C) $1025
D) $25,067
B) $2425
Explanation: Cash interest payment ($28,000 × 10% × 6/12) $1400
Add: Amortized Amount [(($28,000 - $15,700) / 6) × (6/12)] $1025
Total Interest Expense $2425
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