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On January 1, 2006, an investor paid $291,000 for bonds with a

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On January 1, 2006, an investor paid $291,000 for bonds with a face amount of $300,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2006 (assume annual interest payments and amortization)?;A. $23,280.;B. $29,100.;C. $24,000.;D. $30,000.

 

Paper#27405 | Written in 18-Jul-2015

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