Question
On January 1, 2022, Pipestone Corporation issued a four-year, $40,000, 6% bond. The interest is payable annually each December 31. The issue price was $38,645
On January 1, 2022, Pipestone Corporation issued a four-year, $40,000, 6% bond. The interest is payable annually each December 31. The issue price was $38,645 based on an 7% effective interest rate. Pipestone uses the effective-interest amortization method.
The interest expense on the income statement for the year ended December 31, 2022 is closest to:
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Financial statements
Authors: Stephen Barrad
5th Edition
978-007802531, 9780324186383, 032418638X
