On January 1, 2018, Solo Inc. issued 1,000 of its 8%, $1,000 bonds at 98. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2028. Solo paid $50,000 in bond issue costs. Solo uses straight-line amortization. The amount of interest expense for 2018 is:

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Issuance of the bonds. 11ea937b_35f3_508f_a419_73e86ba05b6c_TB2599_00 Although the interest is paid semiannually, the amounts are the same each period under the straight-line method so the entire year is twice the semi-annual amount.