Power Solutions Ltd. issues a $15,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid...

  

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Power Solutions Ltd. issues a $15,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $960,00O. The bond sells at par. Required: 1. How much cash does Power receive when the bond is issued? Power receives 2. What is the effective interest rate on the bond? (Round your answer to the nearest whole percentage.) Effective interest rate per annum % 3. Prepare an amortization table using the effective-interest method of amortization. Complete the first four payments only. (Round your effective interest rate to the nearest whole percentage and your final answers to the nearest whole dollar.) D or P Amortization Closing Net Bond Liab. Cash Interest Interest Period Paid Expense Op. balance 1 2 3 4 Power Solutions Ltd. issues a $15,000,000, five-year, 4.5% bond with semi-annual interest payments. Underwriting costs, paid up front, are $960,00O. The bond sells at par. Required: 1. How much cash does Power receive when the bond is issued? Power receives 2. What is the effective interest rate on the bond? (Round your answer to the nearest whole percentage.) Effective interest rate per annum % 3. Prepare an amortization table using the effective-interest method of amortization. Complete the first four payments only. (Round your effective interest rate to the nearest whole percentage and your final answers to the nearest whole dollar.) D or P Amortization Closing Net Bond Liab. Cash Interest Interest Period Paid Expense Op. balance 1 2 3 4

Answer rating: 100% (QA)

1 Power receives 14040000 2 Effective interest rate per annum 6 Power recei... View the full answer