Answer:
$18,100
Explanation:
The bond is issued on discount when the issuance price is less than the face value of the bond. The discount is amortized over the period until maturity. Total Interest expense on a discounted bond is the sum of the coupon payment and the amortization of the discount amount.
Coupon payment = $570,000 x 6% = $34,200 per year = $17,100 semiannually
Discount on the bond = $570,000 - $560,000 = $10,000
Discount amortized per year = $10,000 / 5 = $2,000 annually = $1,000 semi-annually
Total Interest Expense = Coupon Payment + Amortization of Discount
Total Interest Expense = 17,100 + 1,000 = $18,100
