Question: On January 1 2014 when the market interest rate was

On January 1, 2014, when the market interest rate was 14%, Luba Corporation issued bonds in the face amount of $500,000 with interest at 12% payable semiannually. The bonds mature on December 31, 2023.

Required:
Calculate the bond discount at issuance. How much of the discount should be amortized by the effective interest method on July 1, 2014?


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  • CreatedSeptember 10, 2014
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