204. A corporation issued $600,000, 10%, 7-year bonds on January 1, 2015 for $648,666, which reflects an effective-interest rate of 7%. 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, 2015, 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 is $648,666 and the effective interest rate is 7% annually, or 3.5% semiannually. Thus, the interest expense for the first period is $648,666 * 3.5% = $22,703.31, rounded to $22,703.