Accounting or Bonds Sold at a Discount

The Biltmore National Bank raised capital through the sale of $$120$ million face value of eight percent coupon rate, ten$-$year bonds. The bonds paid interest semiannually and were sold at a time when equivalent risk$-$rated bonds carried a yield rate of ten percent.

Round all answers to the nearest whole number.

a$.$ Calculate the proceeds that The Biltmore National Bank received from the sale of the eight percent bonds.

$Answer

b$.$ Calculate the interest expense on the bonds for the first year that the bonds are outstanding.

$Answer

c$.$ Calculate the book value of the bonds at the end of the first year.

$Answer