On january 1 2006 an investor paid 291000 for bonds with a, Ask an Expert

Accounting

On January 1, 2006, an investor paid $291,000 for bonds with a face amount of $300,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2006 (assume annual interest payments and amortization)?

A. $23,280.

B. $29,100.

C. $24,000.

D. $30,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
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