Question

A corporation issues $40,000,000 of 6% bonds to yield an effective interest rate of 8%.
a. Was the amount of cash received from the sale of the bonds more or less than $40,000,000?
b. Identify the following amounts related to the bond issue:
(1) Face amount,
(2) Market rate of interest,
(3) Contract rate of interest, and
(4) Maturity amount.



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  • CreatedFebruary 04, 2014
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