Question

If $1,000,000 of 9% bonds are issued at 102 3/4, the amount of cash received from the sale is

a.$1,090,000
b.$1,027,500
c.$1,000,000
d.$750,000

Answer 1

b.$1,027,500

Step-by-step explanation:

First we need to find the number of bonds issued so we will divide 1,000,000 by 100 as we assume 100 is the face value. 1,000,000/100=10,000

Now we will multiply the number of bonds by the issue price in order to find the amount of cash received.

10,000*102.75=1,027,500