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Blue & Red, Incorporated, sold $800,000 of bonds on an interest payment date at 102....

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Accounting

Blue & Red, Incorporated, sold $800,000 of bonds on an interest payment date at 102. Assume the bonds will be retired in 10 years and interest is paid annually. The bonds carry a contract interest rate of 6.5 percent.
Calculate the amount of cash that will be received and paid by Blue & Red in the first full year.
Calculate the amount of interest expense that will be recognized in that year.

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