On January 1, 2018, L Co. issued a $100,000 face amount bond with a coupon rate of 8% per annum due in 5 years with semi-annual coupon payments due on June 30 and December 31. The market rate of interest (effective rate) for the bonds was 6% per annum on the day of issue. How much cash would L Co. receive on January 1 for the sale of the bonds?

$92,015

$108,425

None of the other options

$108,530

$91,889

On January 1, 2018, M Co. issued a $200,000 face amount bond with a coupon rate of 8% per annum due in 5 years with semi-annual coupon payments due on June 30 and December 31.The market rate of interest (effective rate) for the bonds was 10% per annum on the day of issue. The present value of the bonds on January 1, 2018 is $184,556.

How much total interest expense (rounded to the nearest dollar) would Lake Michigan record for the year ended December 31, 2018?

$20,000

$18,517

None of the other options

$9,228

$18,455

What would be the carrying value of the bond (rounded to the nearest dollar) on M Co. books on December 31, 2018?

$185,784

$187,011

$187,074

$182,161

None of the other options

On January 1, 2018, L S issued $100,000 face value bonds with a coupon rate of 4% per annum due in five years with semi-annual coupon payments due on June 30 and December 31.The market rate at the time of the issuance was 6% per annum. On January 1, 2019 it decided to try to repurchase (retire) the bond by buying it back when the market rate of interest for the bond is 7% per annum.The carrying value of the bonds on January 1, 2019 was $92,980.How much gain or loss (rounded to the nearest dollar), if any, would L S recognize on the sale of the bond?

None of the other options

$3,291 Gain

$3,291 Loss

$10,311 Gain

$10,311 Loss