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On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay
On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Assume that Worthy has not chosen the fair value option, interest rates decrease during the period, and Worthy pays off the bond at maturity. Which of the following is true?
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