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Calculate the interest expense

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Problem - Pearson Co issue its $92,700 at a price of 103, the stated rate is 9%, the bond term is 4 years, and the market rate is 5%. Assume the term of the bonds is 4 years.

Required -

1. Using the effective interest method, calculate the interest expense in the 1st year?

2. Using the straight line method of amortization, calculate the interest expense in the 1st year?

Reference no: EM132452085

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