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QUESTION
On January 1, 2011, an investor paid $291,000 for bonds with a face amount of $300,000. The stated rate of interest is 8% while the current market...
On January 1, 2011, an investor paid $291,000 for bonds with a face amount of $300,000. The stated 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 2011 (assume annual interest payments and amortization)?
