In E14-7

How do you find the effective interest rate (%) ?

The effective interest rate is 12%, but how do you get to 12%?

E14-6 LOI, Amortization Schedule Straight Line) Devon Harris Company sells 10% bonds having maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022 Intenest is payable annually on January 1. Instructions Set up schedule of interest expense and discount amortization under the straight-line method. Round answers to the nearest cent) 14-7 (Lo1) (Amortization Schedule-Effective-Interest) Assume the same information asB14-6. Instructlons Set up a schedule of interest expense and discount amoetization under the effective-interest method. (Hint: The effective-interest rate must be computed.)