A five-year, $500,000 bond was issued on 1/11/11. The stated rate of interest was 10%,...
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Accounting
A five-year, $500,000 bond was issued on 1/11/11. The stated rate of interest was 10%, and the effective rate of interest was 14%. The interest is paid semiannually. Which of the following statements is correct? Please explain how you got the answer. A.) This bond was issued at a premium, and the semiannual cash payment is $25,000 per period. B.) This bond was issued at a discount, and the annual cash interest payment is $25,000. C.) This bond was issued at a discount, and the semiannual cash payment is $25,000 per period. D.) This bond was issued at a premium, and the annual cash payment is $25,000 per period
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