   # On October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________. A.$200,000 B. $558,438 C.$2,233,750 D. $6,701,250 FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 #### Solutions Chapter Section FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 Chapter 13, Problem 8MC Textbook Problem 42 views ## On October 1 a company sells a 3-year,$2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________.A. $200,000B.$558,438C. $2,233,750D.$6,701,250

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.

Simple interest:

Simple interest is the amount of interest paid on the principal amount using a fixed interest rate. The formula to calculate the Simple interest is as follows:

Simple Interest = Principal amount × Interest rate × Period

To choose:

The amount to collect by the company on October 1.

### Explanation of Solution

The amount to collect by the company on October 1 is calculated as follows:

The company shall collect the issue price of the bonds on October 1 that is = 2500000×89

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Find more solutions based on key concepts
Describe how to account for organization costs.

College Accounting, Chapters 1-27

What is Form 944?

PAYROLL ACCT.,2019 ED.(LL)-TEXT

How is the price elasticity of supply calculated? Explain what it measures.

Principles of Macroeconomics (MindTap Course List)

RATIO CALCULATIONS Assume the following relationships for the Brauer Corp.: Sales/Total assets 1.5x Return on a...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List) 