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McDougal Company sold a $500,000, 5-year, 9% APR bond issue on January 1, 2019 for...

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Accounting

McDougal Company sold a $500,000, 5-year, 9% APR bond issue on January 1, 2019 for a selling price of $480,595. The bonds pay interest semiannually on June 30 and December 31. The effective rate is 10% APR. McDougal incurred bond issue costs of $15,140 and will use the effective interest method to amortize any premium/discount and debt issuance costs. McDougal determined that the revised effective rate is 10.82% APR.

Determine Bond Interest Expense for the year ended December 31, 2019:

a. $48,146

b. $46,555

c. $50,373

d. $50,507

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