Auerbach Inc. issued 4% bonds on October 1, 2009. The bonds have a maturity date of September 30, 2019 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2010. The effective interest rate established by the market was 6%.
Assuming that Auerbach issued the bonds for $255,369,000, what interest expense would it recognize in its 2009 income statement?