Question
On January 1, 2019, Fletcher bought a 20-year, 10% debt instrument with a stated redemption price of $300,000 at original issue for $258,000. The yield-to-maturity
On January 1, 2019, Fletcher bought a 20-year, 10% debt instrument with a stated redemption price of $300,000 at original issue for $258,000. The yield-to-maturity is 12%, compounded semiannually and provides for qualified stated interest payments of $15,000 on June 30 and December 31 of each year, the 6-month accrual periods.
What is the OID that Fletcher must include in his taxable income for the first accrual period?
| a. | $10,480 | |
| b. | $480 | |
| c. | $3,000 | |
| d. | $15,480 |
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Basic Finance An Introduction to Financial Institutions Investments and Management
Authors: Herbert B. Mayo
10th edition
1111820635, 978-1111820633
