Brown Co. issued $100 million of its 10% bonds on April 1, 2018, at 99 plus accrued interest. The bonds are dated January 1, 2018, and mature on December 31, 2037. Interest is payable semiannually on June 30 and December 31. What amount did Brown receive from the bond issuance?

Question

Quizplus · Accepted Answer

$101.5 million: Brown received $99 million from the sale of the bonds ($100 million × .99) and $2.5 million in accrued interest ($100 million × .05 × 3/6) or ($100 million × .10 × 3/12).

Brown Co Issued $100 Million of Its 10% Bonds on April