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Auerbach Inc. issued 6% bonds on October 1, 2021. The bonds have a maturity date...

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Accounting

Auerbach Inc. issued 6% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $400 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 8%. Assuming that Auerbach issued the bonds for $345,639,960, what interest expense would it recognize in its 2021 income statement?

Multiple Choice:

$0

$6,912,799

$13,825,598

$8,000,000

Answer & Explanation Solved by verified expert
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