A company issued 7%,5-year bonds with a par value of $100,000.The market rate when the bonds were issued was 7.5%.The company received $97,946.80 cash for the bonds.Using the effective interest method,the amount of interest expense for the second semiannual interest period is:

A) $3,500.00.
B) $3,679.49.
C) $3,673.01.
D) $7,000.00.
E) $7,346.03.

The effective interest method takes into account the effective interest rate, which is the market rate of interest when the bonds were issued.
The effective interest rate for this bond is 7.5%.
For the first semiannual interest payment, the interest expense is calculated as:
Interest expense = carrying value of bond x effective interest rate x time
= $97,946.80 x 7.5% x 6/12
= $3,672.97
The carrying value of the bond at the end of the first semiannual period is:
Carrying value = par value of bond - discount amortization
= $100,000 - ($97,946.80 - $100,000)
= $2,053.20
For the second semiannual interest payment, the interest expense is calculated as:
Interest expense = carrying value of bond x effective interest rate x time
= $2,053.20 x 7.5% x 6/12
= $6,821.64
The discount amortization for the second semiannual period is:
Discount amortization = total interest expense - interest expense for the first semiannual period
= $6,821.64 - $3,672.97
= $3,148.67
Therefore, the amount of interest expense for the second semiannual interest period is $3,672.97 + $3,148.67 = $6,821.64, which is closest to option B, $3,679.49 after rounding.