Reference no: EM13924702
Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount:
a. Spring, Inc., issued $300,000 of 10 year, 8 percent bonds at 103.
b. Valley, Inc., issued $100,000 of five year, 12 percent bonds at 97 ½.
c. River Co. issued $200,000 of five year, 6 percent bonds at 102 ¼.
d. Snow, Inc., issued $80,000 of four year, 8 percent bonds at 96.
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Effective annual interest rate on this lending arrangement
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Cash proceeds from bond issues under the following terms
: Snow, Inc., issued $80,000 of four year, 8 percent bonds at 96.
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Bank offers a loan on the terms
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