A company issued 9%, 5-year bonds with a par value of $115,000. The market rate when the bonds were issued was 10%. The company received $110,558 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:
A. $5527.90.
B. $11,055.80.
C. $10,350.00.
D. $5175.00.
E. $5750.00.
Answer: A
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