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LO . 1 On July 1 , 2 0 2 3 , Katrina purchased tax - exempt bonds ( face value of $ 7 5

. 1

On July

1, 2023,

Katrina purchased tax

-

exempt bonds

(

face value of $

75, 000)

for

82, 000 .

The bonds mature in five years, and the annual interest rate is

3 % .

Discuss

the tax reporting implications of this transaction.

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