Exhibit 14-1 A $300,000, ten-year, 8% bond issue was sold to yield 9% interest payable annually. Actuarial information for 10 periods is as follows:
-Refer to Exhibit 14-1. At date of issuance cash received would be

Question

Exhibit 14-1 A $300,000, ten-year, 8% bond issue was sold to yield 9% interest payable annually. Actuarial information for 10 periods is as follows: 
-Refer to Exhibit 14-1. At date of issuance cash received would be

Quizplus · Accepted Answer

Cash received at date of issuance is equal to the face amount of the note, which is $300,000. However, the note is issued at a discount, which means that the cash received is less than the face amount. The discount is calculated as the difference between the face amount and the present value of the note. The present value of the note is calculated using the formula:PV = FV / (1 + r)^nwhere:PV is the present valueFV is the face valuer is the annual interest raten is the number of yearsIn this case, the face value is $300,000, the annual interest rate is 6%, and the number of years is 5. Plugging these values into the formula, we get:PV = $300,000 / (1 + 0.06)^5PV = $280,747.07Therefore, the cash received at date of issuance is $280,747.07.

Exhibit 14-1 a $300,000, Ten-Year, 8% Bond Issue Was Sold