Short Answer
On January 1,2013,Woolfe Corporation issued five-year term bonds with a face value of $1,400,000.Interest is payable annually on December 31.The bonds were issued for $1,454,600.The effective interest method of amortization is used.Woolfe reported Bond Interest Expense of $130,914 on its income statement for the year ended December 31,2013.Calculate the effective interest rate for these bonds.
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