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What method must be used under IFRS to amortize the discount

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Question - ABC Corporation issued a $ 1,000,000 bond due in 5 years which bears an annual interest rate of 5% when the market (yield) rate of interest is 7%. Will this bond be issued at a discount or premium? Explain the economic reasoning for your answer?

b) XYZ Corporation, a public corporation, issues a bond payable of $ 10,000,000 at a discount of $75,000.

i) What method must be used under IFRS to amortize the discount?

ii) Will interest expense be more or less than the amount of interest actually paid? Why?

Reference no: EM133069114

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