Ellis Co issued bonds with a face value of $150,000 on January 1, 2013 The bonds had a 6 percent stated rate of interest and a five year term The bonds were issued at face value Required a What total amount of interest will Ellis pay in 2013 if bond interest is paid annually each December 31 b What...

a 150000 x 6 9000 b 150000 x 6 x 612 4500 on June 30 150000 x 6 x 612 4500 on December 31 Or a total ...

Ellis Co. issued bonds with a face value of $150,000 on January 1, 2013. The bonds had

Question:

Ellis Co. issued bonds with a of $150,000 on January 1, 2013. The bonds had a 6 percent stated rate of interest and a five-year term. The bonds were issued at
a. What total amount of interest will Ellis pay in 2013 if bond interest is paid annually each December 31?
b. What total amount of interest will Ellis pay in 2013 if bond interest is paid semiannually each June 30 and December 31?
c. Write a memo explaining which option Ellis would prefer.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...