Pinnacle Corp. issued 4% bonds on October 1, 2022. The bonds have a maturity date of September 30, 2032 and a face value of $400 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2023. The effective interest rate established by the market was 6%. Assume that Pinnacle Corp. issued the bonds for $340,491,760. Calculate the amount Pinnacle Corp. would report for its net bond liability balance on December 31, 2022.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
Pinnacle Corp. issued 4% bonds on October 1, 2022. The bonds have a
maturity date of September 30, 2032 and a face value of $400 million.
The bonds pay interest each March 31 and September 30, beginning
March 31, 2023. The effective interest rate established by the market
was 6%. Assume that Pinnacle Corp. issued the bonds for $340,491,760.
Calculate the amount Pinnacle Corp. would report for its net bond
liability balance on December 31, 2022.
$341,599,000
O $336,492,000
O $399,000,000
O $344,492,000
Transcribed Image Text:Pinnacle Corp. issued 4% bonds on October 1, 2022. The bonds have a maturity date of September 30, 2032 and a face value of $400 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2023. The effective interest rate established by the market was 6%. Assume that Pinnacle Corp. issued the bonds for $340,491,760. Calculate the amount Pinnacle Corp. would report for its net bond liability balance on December 31, 2022. $341,599,000 O $336,492,000 O $399,000,000 O $344,492,000
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education