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Compute amount of interest expense that must be recognized

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On January 1, 2020, Pipe Pig Inc. issued $500,000 of 10%, 5-year bonds for $463,199.56. The bonds mature in 5 years and the market rate of interest is 12%. Interest is payable each July 1 and January 1.

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Problem 1: Assuming the company uses the effective-interest rate method of amortization, compute the amount of interest expense that must be recognized on July 1, 2020.

Reference no: EM132621585

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