A company issues 9% bonds with a par value of $50,000 at par on January 1. The market rate on the date of issuance was 8%. The bonds pay interest semiannually on January 1 and July 1. The cash paid on July 1 to the bond holder(s) is: Multiple Choice $4,500. $2,000.

A company issues 9% bonds with a par value of $50,000 at par on January 1. The market rate on the date of issuance was 8%. The bonds pay interest semiannually on January 1 and July 1. The cash paid on July 1 to the bond holder(s) is: Multiple Choice $4,500. $2,000.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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Question

A company issues 9% bonds with a par value of $50,000 at par on January 1. The market rate on the date of issuance was 8%. The bonds pay interest
semiannually on January 1 and July 1. The cash paid on July 1 to the bond holder(s) is:
Multiple Choice
$4,500.
$2,000.

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