On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.Nadir uses the effective interest method of amortization.On its income statement for the year ended December 31,2011,Nadir will show interest expense of ________.
A) exactly $60,000
B) more than $60,000
C) less than $60,000
D) The answer cannot be determined without knowing the price for which the bonds were sold.
Correct Answer:
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