Question: ABC issues bonds to help pay for a new acquisition. The face value of the bonds being issued is $150,000. The bonds will be repaid

ABC issues bonds to help pay for a new acquisition. The face value of the bonds being issued is $150,000. The bonds will be repaid in 10 years. The coupon rate on the bonds is 8%. The bonds pay interest semi-annually.

3. If the market rate at the time of issuance was 6%, how much interest (total proceeds) will ABC receive upon issuance of the bonds?

5. If the market rate at the time of issuance was 10%, how much interest (total proceeds) will ABC receive upon issuance of the bonds?

6. If the market rate at the time of issuance was 6%, what will be the bond premium recognized upon issuance of the bonds?

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