Question
Mountain Excursions issues bonds due in 10 years with a stated interest rate of 13% and a face value of $180,000. Interest payments are made
Mountain Excursions issues bonds due in 10 years with a stated interest rate of 13% and a face value of $180,000. Interest payments are made semi-annually. The market rate for this type of bond is 14%. Using a financial calculator or Excel, calculate the issue price of the bonds.
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A) $180,000.
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B) $109,582.
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C) $190,323.
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D) $170,465.
On January 1, 2021, Legion Company sold $250,000 of 8% ten-year bonds. Interest is payable semiannually on June 30 and December 31. The bonds were sold for $218,844, priced to yield 10%. Legion records interest at the effective rate. Legion should report bond interest expense for the six months ended June 30, 2021, in the amount of: (Round your answer to the nearest dollar amount.)
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A) $10,942.
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B) $12,500.
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C) $40,000.
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D) $10,000.
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