# On January 1, a company issued a 5-year \$100,000 bond at 6%. Interest payments on the bond of \$6,000 are to be made annually. If the company received proceeds of \$112,300, how would the bond’s issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 13, Problem 5MC
Textbook Problem
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## On January 1, a company issued a 5-year \$100,000 bond at 6%. Interest payments on the bond of \$6,000 are to be made annually. If the company received proceeds of \$112,300, how would the bond’s issuance be quoted?A. 1.123B. 112.30C. 0.890D. 89.05

To determine

Concept introduction:

Bonds:

are defined as debt instruments which are usually issued by the company that borrows to its lenders. They are issued at a rate of interest that is specified and for a specified period of time. The bondholders receive a fixed rate of interest on the bonds and the repayment of the bonds is made at the maturity date.

To choose:

The Quoted issue price of the bond.

### Explanation of Solution

The Quoted issue price of the bond is calculated as percentage of the par value of the bond. The par value of bond is generally considered \$100...

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