Final answer:
The total bond issue costs for Hamlet Inc., which include printing and engraving costs, legal fees, CPA fees, and underwriter commission, amounts to $408,000, with direct bond issue costs being $379,000. The figure $149,000 is incorrect.
Step-by-step explanation:
The student is asking about bond issue costs, which are the expenses incurred by an issuer, such as Hamlet Inc., to issue bonds. The total costs include the fees for printing bond certificates, legal fees, CPA fees for registration, and underwriter commissions. To calculate the total bond issue costs, one must sum these expenses:
- Printing and engraving bond certificates: $29,000
- Legal fees: $120,000
- CPA fees for registration: $9,000
- Underwriter commission: $250,000
The sum of these costs is $408,000. However, only certain expenses are considered to be direct costs of issuing the bonds. Direct costs usually include professional fees related to the issuance (such as legal and accounting fees), along with underwriting fees. Therefore, the direct bond issue costs are:
- Legal fees: $120,000
- CPA fees for registration: $9,000
- Underwriter commission: $250,000
When these are added together, the total is $379,000, which represents the true direct bond issue costs. The initial figure provided in the question, $149,000, is incorrect.