On September 1, 2009, Sam's Shoe Co. issued $350,000 of 8% bonds. The bonds pay interest semiannually on January 1 and July 1 of each year. The bonds were sold at the face amount. How much cash did Sam's receive upon sale of the bonds?

Question

Quizplus · Accepted Answer

The face amount of the bond is $350,000, which is the amount Sam's Shoe Co. received upon sale of the bonds. The fact that the bonds pay interest semiannually on January 1 and July 1 is relevant for calculating the interest expense and amortization of the bond premium or discount over the life of the bond, but it does not affect the cash received at the time of issuance. Therefore, the correct calculation is $350,000, which corresponds to answer choice C.