Rana purchases a 5%, $100,000 corporate bond at issuance on January 1, 2018 for $91,500. The bond matures in five years. In 2018 Rana will recognize interest income of

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Rana will recognize interest income greater than $5,000 because the bond was purchased at a discount. The interest income includes both the coupon payment ($5,000) and the amortization of the discount over the bond's life.

Rana Purchases a 5%, $100,000 Corporate Bond at Issuance on January