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On January 1, 2014, Ivy Company sold 6% bonds having a maturity value of 400,000. The market determined that 8% was the appropriate rate of

On January 1, 2014, Ivy Company sold 6% bonds having a maturity value of 400,000. The market determined that 8% was the appropriate rate of iterest, given the risks that Ivy Company presents to bondholders. The bonds are dated January 1, 2014, mature January 1, 2018, and pay interest on June 30 and December 31 of each year.

  1. Using the Present Value Tables given to determine the amount that bondholders will pay Ivy for these bonds when the bonds are issued on January1, 2014.

2. Complete the effective interest amortization table for the years 2014 through 2017

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