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Lerner Inc. issued bonds several years ago for more than face value. The bonds had...

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Accounting

Lerner Inc. issued bonds several years ago for more than face value. The bonds had a face value of $100,000 and pay interest annually at 9% on 12/31 each year. The market rate on the date of issue was 8%. Assume the carrying value of the bonds throughout 20X2 is 104,000. Lerner prepares annual financial statements at 12/31 each year. How much interest expense will Lerner recognize in 20X2 related to these bonds?

A. $9,000 B. $8,000 C. $9,360 D. $8,320

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