$100,000 of 9%,10-year bonds were issued for $106,710 when the market rate of interest was 8%.The bonds pay interest once a year.
1.How much interest will be paid in cash in the first year?
2.How much interest expense will be reported for the first year,assuming the company uses effective-interest amortization?
3.How much interest expense will be reported for the first year,assuming the company uses straight-line amortization?

Question

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The Answer of $100,000 of 9%,10-year bonds were issued for $106,710 when the market rate of interest was 8%.The bonds pay interest once a year.
1.How much interest will be paid in cash in the first year?
2.How much interest expense will be reported for the first year,assuming the company uses effective-interest amortization?
3.How much interest expense will be reported for the first year,assuming the company uses straight-line amortization?

$100,000 of 9%,10-Year Bonds Were Issued for $106,710 When the Market