Bonita Hills Ltd

Accounting Nov 26, 2020

Bonita Hills Ltd. issued five-year bonds with a face value of $150,000 on January 1. The bonds have a coupon interest rate of 6% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 4% when the bonds were issued at a price of 109. (a) Your answer is incorrect. Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds

Expert Solution

roceeds from issue of bonds$163,500Workings:Proceeds received when bonds issued =Face value * 109%=$150,000 * 109%=$163,500

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