Answer:
B. $784,249
Explanation:
The effective interest amortization is an accounting practice used for discounting a bond. This method isused for bonds sold at a discount; the amount of the bond discount is amortised as interest expense over the bond's life
Interest expenses for 6 months from Jan 1st to Jun 30th is $392,083 = $9,802,072* 8%/2
Amortization of Discount is $2,083= $9,802,072* 8%/2 - 10,000,000*7.8%,/2
Carry Amount of Bond on June 30 $9,804,155= bond proceed of $9,802,072 + Amortization of Discount is $2,083
Interest expenses for 6 months from Jul 1st to Dec 31st is $392,166 = Carry amount of Bond $9,804,155 x effective rate 8%/2
Total interest expense will be recognized in 2018 is $784,249 = $392,083 + $392,166
