198. A corporation issued ¥800,000,000, 10%, 5-year bonds on January 1, 2014 for ¥864,888,000, which reflects an effective-interest rate of 8%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2014, is

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The bond interest expense is calculated using the effective interest rate on the carrying amount of the bonds. The carrying amount on January 1, 2014, is ¥864,888,000. The effective interest rate is 8% annually, or 4% semiannually. Therefore, the interest expense for the first six months is ¥864,888,000 * 4% = ¥34,595,520.