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On January 1, 2020, Rex Co issued $4,000,000 face value, 14%, 5-year bonds at $4,288,384....

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Accounting

On January 1, 2020, Rex Co issued $4,000,000 face value, 14%, 5-year bonds at $4,288,384. This price resulted in a 12% effective-interest rate on the bonds. Rex Co uses the effective-interest method to amortize bond premium. The bonds pay annual interest on each January 1.

How much interest expense did Rex Co record on December 31, 2020?

Group of answer choices

a. $480,000

b. $560,000

c. $514,606

d. $502,324

Answer & Explanation Solved by verified expert
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