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Jones Company issued bonds with a $130,000 face value on January 1, Year 1. The five-year term bonds were issued at 97 and had a
Jones Company issued bonds with a $130,000 face value on January 1, Year 1. The five-year term bonds were issued at 97 and had a 7,00% stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information:
The amount of interest expense shown on Jones's December 31, Year 1 income statement would be:
A. $9,880
B. $8,320
C. $10,660
D. $9,100
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