On July 1 of the current year, Block Company issued $200,000 of 10% ten-year bonds for $227,180 when the market rate of interest was 8%. Interest is payable each year on January 1 and July 1, beginning January 1, next year. Assuming the effective interest rate method is used, what amount of interest expense should Block accrue on December 31 of the current year?
- A. $9,087.
- B. $10,000.
- C. $8,000.
- D. $11,359.
------------------------------
SUVARNA CHIRUKANDATH ULLAS
Thrissur
India
------------------------------