On June 30, 2023, Pharoah Limited issued $3 million of 20-year, 13% bonds for $3,225,689, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On June 30, 2023, Pharoah Limited issued $3 million of 20-year, 13% bonds for $3,225,689, which provides a yield of 12%. The
company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June
30 and December 31.
(a)
Transcribed Image Text:On June 30, 2023, Pharoah Limited issued $3 million of 20-year, 13% bonds for $3,225,689, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31. (a)
(c3)
x Your answer is incorrect.
What is the total cost of borrowing over the life of the bond?
Total cost of borrowing over the life of the bond -
$
58325
Transcribed Image Text:(c3) x Your answer is incorrect. What is the total cost of borrowing over the life of the bond? Total cost of borrowing over the life of the bond - $ 58325
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