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How much cash does the corporation pay back to bondholders

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Question - On January 1, of the current year, Company Inc. issued bonds with a face value of $200,000. The bonds pay interest annually and mature in 10 years. The bonds have a stated interest rate of 3%. The market rate at date of issue was 4%.

Required -

1. How much cash does the corporation receive when the bond is issued?

2. How much cash does the corporation pay back to the bondholders at maturity (not including the normal year end interest payment)?

3. What will be the total amount of interest expense recognized over the life of the bonds?

Reference no: EM133154054

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