Question: A government has $2,000,000 of 6%, 10-year general obligation bonds outstanding. The bonds were issued on July 2, 2012 to finance construction of a general capital asset. Interest is payable semiannually on January 1 and July 1, and $200,000 of principal is due each July 1.
Required: What is the maximum amount of interest the government would report for the fiscal year ending December 31, 2012?