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Goo Goo Enterprises invested in the bonds of Greater Glouster. These bonds pay interest of...

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Accounting

Goo Goo Enterprises invested in the bonds of Greater Glouster. These bonds pay interest of 2%. The effective rate
of interest for similar bonds on the date of investment was 6%. Did Goo Goo purchase the bonds at a discount
or premium?
A. These bonds were purchased at a premium because the market rate exceeds the stated rate.
B. These bonds were purchased at a discount because the stated rate exceeds the market rate.
C. These bonds were purchased at a discount because the market rate exceeds the stated rate.
D. These bonds were purchased at a premium because the stated rate exceeds the market rate.
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