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Exercise 14-7 Indigo Company sells 8% bonds having a maturity value of $1,700,000 for $1,511,507....

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Accounting

Exercise 14-7 Indigo Company sells 8% bonds having a maturity value of $1,700,000 for $1,511,507. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.

a.Determine the effective-interest rate.

b.Set up a schedule of interest expense and discount amortization under the effective-interest method.

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