The sale and issuance of $800,000, 9% bonds with a market rate of 9% would involving debiting Cash for:

A) $872,000.
B) $836,000.
C) $800,000.
D) $72,000.

Question

The sale and issuance of $800,000, 9% bonds with a market rate of 9% would involving debiting Cash for:A)  $872,000.B)  $836,000.C)  $800,000.D)  $72,000.

Vaishali Patil · Accepted Answer

Final Answer : C, Explanation :  When bonds are issued at their face value, the cash received is equal to the face value of the bonds. Since the market rate of interest (9%) matches the coupon rate (9%), the bonds are issued at par, meaning the cash debited is exactly $800,000, the face value of the bonds.

The sale and issuance of $800,000, 9% bonds with a market rate of 9% would involving debiting Cash for:

A) $872,000.
B) $836,000.
C) $800,000.
D) $72,000.

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