Question
Absolute Investment Company (AIC) purchased bonds on January 1, 2024. AIC's accountant has projected the following amortization schedule from purchase until maturity: Date Cash Received
Absolute Investment Company (AIC) purchased bonds on January 1, 2024. AIC's accountant has projected the following amortization schedule from purchase until maturity:
| Date | Cash Received | Interest Revenue | Amortization of Discount | Amortized Cost |
|---|---|---|---|---|
| 1/1/2024 | $126,701 | |||
| 6/30/2024 | $5,850 | 6,335 | $485 | 127,186 |
| 12/31/2024 | 5,850 | 6,359 | 509 | 127,695 |
| 6/30/2025 | 5,850 | 6,385 | 535 | 128,230 |
| 12/31/2025 | 5,850 | 6,412 | 562 | 128,792 |
| 6/30/2026 | 5,850 | 6,440 | 590 | 129,382 |
| 12/31/2026 | 5,850 | 6,468 | 618 | 130,000 |
What is the annual market interest rate on the bonds?
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Auditing A Business Risk Approach
Authors: Larry E. Rittenberg, Karla Johnstone, Audrey Gramling
7th Edition
0324663722, 978-0324663723
