Amount of interest expense

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Reference no: EM13123386

Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2009. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.

What is the amount of interest expense Herman will show with relation to these bonds for the year ended December 31, 2010?

a. $16,000

b. $15,080

c. $17,150

d. $14,850

Reference no: EM13123386

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