Weller Company issued bonds with a face value of $400,000, a 10% stated rate of interest, and a 10-year term. The bonds were issued on January 1, 2016, and Weller uses the effective interest method of amortization. The market rate of interest on the date of issue was 8%. Interest is paid annually on December 31.
Assuming Weller issued the bond for $431,940, the amount of interest expense appearing on the 2018 income statement would be: A. $33,649.
B. $20,000.
C. $34,120.
D. $46,350.
