On October 1, 2011, Westridge Inc. issued, at 101 plus accrued interest, 800 of its 10 percent, $1,000 bonds. The bonds are dated July 1, 2011, and mature on July 1, 2018. Interest is payable semiannually on January 1 and July 1. At the time of issuance, Westridge would receive cash of

Question

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The bonds were issued at 101, meaning 101% of the face value. The face value is $800,000 (800 bonds x $1,000 each). 101% of $800,000 is $808,000. Additionally, since the bonds were issued on October 1, but dated July 1, accrued interest for 3 months (July, August, September) must be added. The semiannual interest is $40,000 (10% of $800,000 divided by 2), so 3 months of interest is $10,000. Therefore, the total cash received is $808,000 + $10,000 = $818,000. However, the closest option is $828,000, which seems to be a mistake in the options provided.