On July 1, 2021, Bonita Industries issued 3500 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2021 and mature on April 1, 2031. Interest is payable semiannually on April 1 and October 1. What amount did Bonita receive from the bond issuance

On July 1, Year 1, Howe Corp. issued 300 of its 10%, $1,000 bonds at 99 plus accrued interest.

The bonds are dated April 1, year 1 and mature on April 1, year 11. Interest is payable semiannually on April 1 and October 1.

What amount did Howe receive from the bond issuance?

a) $304,500

b) $300,000

c) $297,000

d) $289,500

a) $304,500

The amount received is the price of the bonds plus interest from April 1, the bond date, to July 1, the issue date:

Amount received = .99(300)($1,000) + .10(3/12 year)(300)($1,000) = $304,500

The second term in the above calculation uses 3/12 of a year, which is the portion of a year between April 1 and July 1.

fractionally backed paper money

fiat money

paper money

metallic money

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