Question
On June 30, 2020, Cullumber Limited issued $3 million of 20-year, 10% bonds for $3,593,786, which provides a yield of 8%. The company uses the
On June 30, 2020, Cullumber Limited issued $3 million of 20-year, 10% bonds for $3,593,786, which provides a yield of 8%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.
What is the total cost of borrowing over the life of the bond?
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Fundamental Accounting Principles
Authors: John J Wild, Ken Shaw
25th Edition
1260247988, 978-1260247985
