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On November 1, 2020, Mills Co. purchased a 5-year, 8% bond with a face value of...

On November 1, 2020, Mills Co. purchased a 5-year, 8% bond with a face value of $200,000. The purchase price of $184,556 was consistent with a 10% yield. Interest is payable semi-annually on January 1 and July 1. The bonds mature on January 1, 2022. The amortized cost of the bond on the maturity date is

a) $200,000

b) $185,556

c) $195,000

d) $190,000

Solutions

Expert Solution

the answer is option a) $200,000- see the above chart for detailed understanding.

ekkarill92 answered 1 year ago
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