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What is the interest expense to be recognized for year two

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Question - The Winslet Company issues a four-year $80,000, 5 percent serial bond on January 1, Year One. Each December 31, starting on December 31, Year One, the company will pay $20,000 plus interest of 5 percent on the unpaid face value for that year. The bond is issued for 90 percent of face value ($72,000) to yield an annual rate of 8 percent. What is the interest expense to be recognized for Year Two?

a. $6,221

b. $4,621

c. $5,901

d. $4,301

Reference no: EM132478709

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