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On January 1, 2021, an investor paid $294,000 for bonds with a face amount of $335,000. The stated rate of interest is 12% while the
On January 1, 2021, an investor paid $294,000 for bonds with a face amount of $335,000. The stated rate of interest is 12% while the current market rate of interest is 14%. Using the effective interest method, how much interest income is recognized by the investor in 2021 (assume annual interest payments and amortization)?
a. $46,900
b. $41,160
c. $35,280
d. $40,200
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