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Question(s) / Instruction(s):

 A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 cash for the bonds. Using the effective interest method, the amount of recorded interest expense for the first semiannual interest period is:

a)            $3,500.00

b)            $7,000.00

c)            $3,286.95.

d)            $6,573.90

e)            $1,750.00

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