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Porter, Inc. issued $400,000, 10 year, 10% bonds for $354,200 on January 1, 2022; the...

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Accounting

Porter, Inc. issued $400,000, 10 year, 10% bonds for $354,200 on January 1, 2022; the bonds pay interest semiannually on June 30 and December 31. On the date of issuance, the interest rate in the bond market is 12%. For the year ending on December 31, 2022 Porter recorded $42,579 as the interest expense. The carrying value of the bond on December 31, 2022 is $356,779. What is the total cost of borrowing over the life of this bond?
Answer choices:
A) $45,800
B) $354,200
C) $400,000
D) $445,800
E) $800,000

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