Homework Answers
face value = 185000
issue price = 196000
interest in cash= facevalue *rate of interest * time
=185000*6%*1year (Jan to december=111,00
amortization =premium amount /number of years * time period
=[196000-185000]/ 5years * 1yea(jan - dec]
=2200
interest expense = cash interest - amortization
=11100-2200
=8900$
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