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What amount did Cullumber Company pay for Waterway Ltd.'s bonds? (Round answer to O decimal places, e.g. 5,275.) Cullumber Company paid

What amount did Cullumber Company pay for Waterway Ltd.'s bonds? (Round answer to O decimal places, e.g. 5,275.) Cullumber Company paid

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, Waterway Ltd. issued bonds with a maturity value of $4.60 million for $4,413,240, when the market rate of interest was 8%. The bonds have a contractual interest rate of 7% and mature on January 1, 2026. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. On January 1, 2021, Cullumber Company, a public company, purchased Waterway Ltd. bonds with a maturity value of $0.92 million to earn interest. On December 31, 2021, the bonds were trading at 99. Both companies' year end is December 31. Click here to view the factor table. Present Value of 1 Click here to view the factor table. Present Value of an Annuity of 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) What amount did Cullumber Company pay for Waterway Ltd's bonds? (Round answer to O decimal places, e.g. 5,275.) Cullumber Company paid
Transcribed Image Text:On January 1, 2021, Waterway Ltd. issued bonds with a maturity value of $4.60 million for $4,413,240, when the market rate of interest was 8%. The bonds have a contractual interest rate of 7% and mature on January 1, 2026. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. On January 1, 2021, Cullumber Company, a public company, purchased Waterway Ltd. bonds with a maturity value of $0.92 million to earn interest. On December 31, 2021, the bonds were trading at 99. Both companies' year end is December 31. Click here to view the factor table. Present Value of 1 Click here to view the factor table. Present Value of an Annuity of 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) What amount did Cullumber Company pay for Waterway Ltd's bonds? (Round answer to O decimal places, e.g. 5,275.) Cullumber Company paid
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