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GAAP vs. IFRS: Liabilities
15. GAAP vs IFRS / GAAP vs. IFRS: Liabilities / Problem 9
Problem 9

A company issues a bond with a face value of \$100,000 at a premium, receiving \$105,000. The bond has a coupon rate of 5% and a market rate of 4%. What is the interest expense for the first year using the effective interest method?