What is the total expense for debt for year one

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ABC Inc. issued $100 million of 8% three-year bonds, with coupon paid at the end of every year. The effective interest rate at the beginning of Years 1, 2, and 3 was 10%, 8%, and 5%. 

Problem 1: Assume ABC Inc. accounts for the bonds using the amortized cost method. What is the total interest expense for year 1, year 2 and year 3, respectively? (Round to the nearest dollar)

Problem 2: Assume ABC Inc. accounts for the bonds using the fair value method. What is the total expense for debt for year 1, year 2 and year 3, respectively?

Reference no: EM132928092

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