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Auerbach Inc. issued 5% bonds on October 1, 2021. The bonds have a maturity date...

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Accounting

Auerbach Inc. issued 5% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $250 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 7%. How much cash interest does Auerbach pay on March 31, 2022? (Round your answer to 2 decimal places.)

Multiple Choice

  • $8.75 million.

  • $6.25 million.

  • $12.50 million.

  • $17.50 million.

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