Question: Most Solutions, Inc., issued 11% bonds, dated January 1, with a face amount of $700 million on January 1, 2016. The bonds mature in 2026
Most Solutions, Inc., issued 11% bonds, dated January 1, with a face amount of $700 million on January 1, 2016. The bonds mature in 2026 (10 years). For bonds of similar risk and maturity the market yield is 13%. Interest expense is recorded at the effective interest rate. Interest is paid semiannually on June 30 and December 31. Most recorded the sale as follows:
January 1, 2016Cash (price)619,707,200Discount on bonds (difference)80,292,800Bonds payable (face amount)700,000,000
Required:What would be the amount(s) related to the bonds that Most would report in its statement of cash flows for the year ended December 31, 2016?(List any cash outflow with a minus sign. Enter your answers in whole dollars.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
