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On January 1 of Year 1, Congo Express Airways issued $3,250,000 of 5% bonds that...

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Accounting

On January 1 of Year 1, Congo Express Airways issued $3,250,000 of 5% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,930,000 and the market rate of interest for similar bonds is 6%. The bond premium or discount is being amortized at a rate of $10,667 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be:

Multiple Choice

$162,500.

$141,166.

$91,917.

$195,000.

$183,834.

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