Auerbach Inc. issued 4% bonds on October 1, 2021. The bonds have a maturity date...
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Auerbach Inc. issued 4% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $450 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 6%. Assuming that Auerbach issued the bonds for $383,053,230, what interest expense would it recognize in its 2021 income statement?
a. $11,491,597
b. $0
c. $5,745,798
d. $6,750,000
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