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The company issues bonds with a face value of $ 8 0 , 0 0 0 and a stated interest rate of 5 % ,

The company issues bonds with a face value of $

80, 000

and a stated interest rate of

5 %,

paid quarerly, at

75 .

The current market rate of interest is

6 % .

The company uses the effective interest rate method. Journal the issuance and

1

st quarters interest payment assuming the company issues quarterly financial statements. Show math please.

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