Essay
On January 1, 2016, Precision Corporation issued a 3-year, 7%, $2,000 bond payable. Beginning in 2017, interest is payable every January 1 over the life of the bond. The market rate of interest on January 1, 2016 is 10%. If Precision uses the effective interest method, what is the book value of the bond payable on January 1, 2016?
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