On January 1, 2018 ABC Corporation issued a five-year $1,000,000, 8%, at $1,250,000. Interest is paid annually on December 31. The market rate of interest is 5%.
a) Using the effective interest rate method, what is the interest expense at December 31, 2018? Interest Expense at December 31,2018 = $___________________________
B)What is the carrying value of the bond at December 31, 2018? Carrying value