On June 30, 2018, L. N. Bean issued $10 million of its 8% bonds for $9 million. The bonds were priced to yield 10%. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, how much bond interest expense should the company report for the 6 months ended December 31, 2018?
A) $400,000
B) $420,000
C) $450,000
D) $500,000
Correct Answer:
Verified
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