FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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At the beginning of his current tax year, David invests $12,840 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 20 years. David receives $580 in interest ($290 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 3.8 percent.
Note: Round your intermediate calculations to the nearest whole dollar amount.
a. How much interest income will he report this year if he elects to amortize the bond premium?
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