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On 1 January 2013, Ouyang Inc. issues $1,000,000 face value, 10-year bonds with annual interest rate of 5% to be paid each 31 December. The
On 1 January 2013, Ouyang Inc. issues $1,000,000 face value, 10-year bonds with annual interest rate of 5% to be paid each 31 December. The market interest rate is 4%. Using the effective interest rate method of amortization, Ouyang Inc. should record when it closes its annual book on Dec 31, 2013 (Round your number to integers):
a) | a carrying amount of 1,081,109 on Dec 31, 2013; |
b) | an interest expense of 42,974 on Dec 31, 2013; |
c) | a cash disbursement of 43,244 on Dec 31, 2013; |
d) | a carrying amount of 1,074,353 on Dec 31, 2013; |
e) | an amortization of discount. |
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