Question
On January 1, 2020, Gibson Co. purchases equipment having a fair value of $200,000 by issuing a three-year, zero-interest-bearing note in the amount of $251,942.
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On January 1, 2020, Gibson Co. purchases equipment having a fair value of $200,000 by issuing a three-year, zero-interest-bearing note in the amount of $251,942. The effective interest rate on the note is 8%. How much interest should Gibson recognize on the note in the year ended December 31, 2020?
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On January 1, 2020, Green Corp. issues $5,000,000 of 7% ten-year bonds at 98. The bonds pay interest semiannually. If the bonds remain outstanding until maturity, what will be the total cost of borrowing over the term of the bonds? Please round your answer to the nearest dollar.
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
16th edition
1118742974, 978-1118743201, 1118743202, 978-1118742976
