On January $1,2024,$ Essence Communications issued $$800,000$ of its $10-$year, $10\%$ bonds for $$630,496.$

The bonds were priced to yield $14\%.$

Interest is payable semiannually on June $30$ and December $31.$

Essence Communications records interest at the effective rate and elected the option to report these bonds at their fair value.

On December $31,2024,$ the market interest rate for bonds of similar risk and maturity was $11\%.$

The bonds are not traded on an active exchange.

The decrease in the market interest rate was due to a $1\%$ decrease in general $($risk$-$free$)$ interest rates