2nd question: Where does it go?
The energy sent to inductors (and to capacitors!) is temporarily stored. Then it flows backwards, going back into the power supply. During 1/2 of an AC cycle, ideally all the energy has returned, and the coil or capacitor has consumed zero.
So, if we connect an inductor to a battery, the coil current rises and energy gets stored in the magnetic field. Next, we suddenly reverse the coil connections. This reverses the current, which then falls smoothly to zero. The magnetic field collapses, and energy flows backwards across the circuit, to "recharge" the battery. Finally, just when the current hits zero, disconnect the battery. That's a simulation of one half-cycle of AC. Ideally, all the energy that went into the inductor, has now flowed backwards and returned again to the battery.
Real AC: hook an ideal, zero-ohm inductor to an AC generator, and the generator will send energy out to the inductor, then suck it all back again, twice per cycle. (It's twice per cycle because energy is sent out and back during the positive phase, and also sent out and back during the negative phase.)
Practical effects: the coil and the connecting wires will warm up because of their resistance. We'd only get 100% energy returned if the coil and wires were superconducting. Real coils also act like resistors, like electric heaters. Also, your AC dynamo rotor will vibrate at 120Hz when trying to drive a large inductor. Twice per cycle the generator sees a load, a large current, then sees an "anti-load" from reversed current, and its shaft gets a forward kick from the returning energy. The average energy flow is zero, yet significant energy is "sloshing" back and forth between the dynamo and the distant inductor.
To eliminate this effect, add a "tuning capacitor" across the inductor, and adjust its value for resonance at 60Hz, 400Hz, whatever was your AC system frequency. Now the "energy sloshing" takes place only between the inductor and capacitor, while the dynamo sees a constant AC load.