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How much cash will he be able to borrow

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Question - Larry has made his decision and Lotus Coffee Inc. issued $50,000 of 4%, 3-year bonds on July 1, 2022. The bonds are dated July 1 and pay interest semi-annually on June 30 and December 31. The market interest rate was 5% for these bonds. Larry is surprised that the amount of cash Lotus will receive for the bonds will be different than $50,000. Why is this the case? How much cash will he be able to borrow? Larry thinks it would be very helpful if you could show him an effective-interest amortization table for the life of these bonds. Also, he asks you to record the issuance of the bonds and the December 31 payment.

Reference no: EM133177531

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