In July 1, 2020, Addison Corp issue $500,000 of 8% bonds for $438,000. The bonds were issued to yield 10%. The bonds are dated July 1, 2020, and mature on July 1, 2030. Interest is payable semi-annually on January 1 and July 1 and Addison uses the effective interest method. Addison's fiscal year end is December 31. At December 31, 2020, Addison Corp should report an interest payable amount of ______
Select one: a. $20,000 b. $21,900 c. $40,000 d. The correct answer is not a choice. e. $25,000