Cheyenne Company sells 8% bonds having a maturity value of $3,440,000 for $3,179,190. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1.

Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.)

The effective-interest rate

%

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Set up a schedule of interest expense and discount amortization under the effective-interest method.