Question

On January 1, 2012, a bond has a carrying value of $89,280 and a face value of $100,000. The market rate of interest is 9% and the stated rate of interest on the bond is 10%. Interest is paid on December 31 of each year.
Required
Calculate interest paid and interest expense for 2012 under the effective interest method.


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  • CreatedJuly 16, 2015
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