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In: Accounting

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1....

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much cash did Martin, inc receive on January 1 year 1?

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much interest will Martin inc pay bondholders on June 30, year 1?

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much interest will Martin inc pay bondholders over the 10 years?

Solutions

Expert Solution

a
Cash 15000000*98% $        14,700,000
b
Payment to bondholders on June 30 Year 1 15000000*3%*6/12 $              225,000
c
Payment of Interest over 10 years 15000000*3%*6/12*20 semi annual periods $          4,500,000

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