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  3. 4. on 1 january 20x8, a borrower arranged a $1,490

4. On 1 January 20X8, a borrower arranged a $1,490,000 three-year 2% bond payable, with...

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Accounting

4. On 1 January 20X8, a borrower arranged a $1,490,000 three-year 2% bond payable, with interest paid annually each 31 December. There was an upfront fee of $159,311, which was deducted from the cash proceeds of the loan on 1 January 20X8.

Required:

a) Calculate the effective interest rate associated with the loan.

b) What net amount is received on 1 January 20X8?

c) Calculate the interest expense reported by the borrower for each year.

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