A taxpayer issues a debt instrument ( a zero coupon bond) in exchange for $600 of cash and the debt instrument requires a single payment at maturity of $1000. The instrument does not provide for any current coupon payments. The term to maturity is 5 years. The instrument is issued on January 1 of the first year and matures on December 31 of the year and the taxpayer elects to use an annual accrual period. The yield is approximately 10.76%. Calculate the OID accruals

Period Beginning AIP OID Payment Ending AIP

1 600 64.54 0.00 664.54

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