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How should mach co account for the debt instrument

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Question - On 1 January 2011 mach Co purchases a debt instrument for its value of 1,000 shs. The debt instrument is due to mature on 31 Dec 2015. The instrument has a principal amount of 1,250 shs and the instrument carries fixed interest at 4.72% that is paid annually. How should mach Co. account for the debt instrument over its five year term?

Reference no: EM132042829

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