Effective-interest method of amortization basics


On January 1, 2005, Renner Corporation issued $800,000, 7%, 5-year bonds for $834,121. The bonds were sold to yield an effective-interest rate of 6%. Interest is paid semiannually on July 1 and January 1. The company uses the effective-interest method of amortization.

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Accounting Basics: Effective-interest method of amortization basics
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