On January 1, 2010, Saldano, Inc.issued $50, 000 of ten-year 8% bonds for $43, 800.Interest was payable semiannually.The effective yield was 10%.The effective interest method of discount amortization was used.What amount of interest expense should be recorded for the six-month period ending December 31, 2010?

A) $2, 205.50
B) $2, 209.00
C) $2, 180.50
D) $2, 199.50

Effective Interest Method

An accounting technique used to allocate the bond premium or discount over the life of the bond in a way that results in a constant rate of interest.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds, typically reported on the income statement within the financing or other expenses section.

Discount Amortization

The process of gradually writing off the initial discount on a bond or loan over the life of the instrument, affecting the issuer's interest expense.