Question

Testbank Multiple Choice Question 64 Marigold Corp. issues $20600000 of 10-year, 9% bonds on March 1, 2020 at 96 plus accrued interest. The bonds are dated January 1, 2020, and pay interest on June 30 and December 31. What is the total cash received on the issue date

Answer 1

$20,085,000

Step-by-step explanation:

Calculation to determine the total cash received on the issue date

Total Cash received =($20,600,000 × .96) +[($20,600,000*9%)*2/12]

Total Cash received=($20,600,000 × .96)

+($1,854,000*2/12)

Total Cash received=$19,776,000+$309,000

Total Cash received=$20,085,000

Therefore the total cash received on the issue date will be $20,085,000