Asked by Kathy Garcia on Jun 26, 2024
Verified
A company paid $37,800 to acquire 8% bonds with a $40,000 maturity value.The company intends to hold the bonds to maturity.The cash proceeds the company will receive when the bonds mature equal:
A) $37,800.
B) $38,325.
C) $40,000.
D) $40,525.
E) $43,200.
Maturity Value
The total amount payable to an investor at the end of a bond's term, including both the principal and the interest.
Bonds
Fixed-income investments representing loans made by an investor to a borrower, typically corporate or governmental.
Cash Proceeds
The total amount of cash received from the sale of goods, asset disposals, or financing transactions.
- Understand the acquisition and maturity value handling of bonds.
Verified Answer
LB
lelandra borgesJun 28, 2024
Final Answer :
C
Explanation :
The company will receive the maturity value of the bonds, which is $40,000, when they mature.
Learning Objectives
- Understand the acquisition and maturity value handling of bonds.