Chapter 14, Problem 4DQ

(a)

To determine

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Contract interest rate: It refers to the interest rate that is stated on the face of the bonds.

Market interest rate: It refers to the interest rate that the lenders expect, or demands from the borrower to part with their money as loan to them.

To identify: The amount of cash received from sales of the bond

(b)

(1)

To determine

To Identify: The amounts of face value.