How would these tax consequences differ

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Question - On January 1, 2014, Latkin Inc. issues bonds with a maturity value of $1,250,000 and a maturity date of December 31, 2019. The bonds pay interest on December 31 of each year at an annual coupon rate of 2 percent. They are sold for proceeds of $1,150,000 for an effective yield of 3.5 percent. The maturity amount is paid on December 31, 2019. What are the tax consequences related to this bond issue for Latkin Inc. in each of the years 2014 through 2019? How would these tax consequences differ from the information included in Latkin's GAAP based financial statements? Latkin Inc. uses the straight-line method to amortize the discount on the bonds for accounting purpose.

Reference no: EM133169986

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