Merchant Company issued 10-year bonds on January 1. The 8% bonds have a face value...
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Accounting
Merchant Company issued 10-year bonds on January 1. The 8% bonds have a face value of $109,000 and pay interest every January 1 and July 1. The bonds were sold for $131,466 based on the market interest rate of 6%. Merchant uses the effective interest rate method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of
a.$4,360
b.$3,270
c.$3,944
d.$5,259
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