On January 1 . 2014, Gustavo Hospital issued a $250,000, 1 . percent, 5-year bond for $231,601 . Interest is payable on June 30 and December 31 . Gustavo uses the effective-interest method to amortize all premiums and discounts. Assuming an effective interest rate of 1 . percent, how much interest expense should be recorded on June 30, 2014?
a. $11,935.14
b. $12,500.00
c. $13,896.06
d. $14,729.82
C
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