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How much interest income is recognized by the investor

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Question - On January 1, 2018, an investor paid $297,000 for bonds with a face amount of $317,000. The contract rate of interest is 10% while the current market rate of interest is 13%. Using the effective interest method, how much interest income is recognized by the investor in 2019 (assume annual interest payments and amortization)? (Round your answer to the nearest dollar amount.)

a. $39,508.

b. $29,700.

c. $47,648.

d. $38,610.

Reference no: EM132579420

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