The long-term liabilities section of Guyton Enterprises follows. The bonds outstanding on January 1, 20-1, have an

Question:

The long-term liabilities section of Guyton Enterprises follows. The bonds outstanding on January 1, 20-1, have an annual coupon rate of 4% and had been issued several years ago at a price to yield 5% per year. The discount is amortized using the effective interest method. On December 31, 20-1, $900,000, 5% bonds were issued at a price to yield 6%.

Long-Term Liabilities Bonds payable Discount on bonds payable Total long-term liabilities December 31, 20-1 January 1, 2

REQUIRED
Compute the cash received from issuing the bonds on December 31, 20-1.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...