On january 1, applied technologies corporation (atc) issued $510,000 in bonds that mature in 10 years. the bonds have a stated interest rate of 8 percent. when the bonds were issued, the market interest rate was 8 percent. the bonds pay interest once per year on december 31. required: 1. determine the price at which the bonds were issued and the amount that atc received at issuance

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Business

Harper Wilkinson

29 November, 06:52

On january 1, applied technologies corporation (atc) issued $510,000 in bonds that mature in 10 years. the bonds have a stated interest rate of 8 percent. when the bonds were issued, the market interest rate was 8 percent. the bonds pay interest once per year on december 31. required: 1. determine the price at which the bonds were issued and the amount that atc received at issuance

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Annabelle Reese · Answer 1

The correct answer for both is $510,000.

Explanation:

According to the scenario, the computation of the given data are as follows:

Issued in Bonds = $510,000

Interest rate = 10%

Market rate = 10%

As, interest rate is equal to market rate of the the bond, So it can be considered as bonds are issued at the face value.

So, the issued price = $510,000

The issuance amount = $510,000