If Eddie Industries issues $1,500,000 of 8% bonds at 105, the amount of cash received from the sale is
A) $1,425,000
B) $1,080,000
C) $1,000,000
D) $1,575,000

Question

Quizplus · Accepted Answer

The bonds are issued at 105, which means they are sold above their face value. To calculate the cash received, we need to multiply the face value of the bonds by the issue price percentage:

$1,500,000 x 105% = $1,575,000

Therefore, the amount of cash received from the sale is $1,575,000.

If Eddie Industries Issues $1,500,000 of 8% Bonds at 105