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Debt is issued for $ 1 , 0 0 0 . The debt is redeemable at $ 1 , 2 5 0 . The term

Debt is issued for $1,000. The debt is redeemable at $1,250. The term of the debt is five years and interest is paid at 5.9% pa. The effective rate of interest is 10%. Show how the value of the debt changes over its life and provide relevant journal entries, solve it without excel.

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