Essay
On January 1, 2016, Luna Corporation issued a 5-year, 7%, $5,000 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 7%. Luna uses the effective interest method. Calculate the balance sheet value of the bond payable on January 1, 2017.
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