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Downs Company Issued $400,000 of 8%, 5-Year Bonds at 106

Question 224

Multiple Choice

Downs Company issued $400,000 of 8%, 5-year bonds at 106, which pays interest annually. Assuming straight-line amortization, what is the total interest cost of the bonds?


A) $184,000
B) $136,000
C) $112,000
D) $160,000

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