What are the proceeds from issuing the bond

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Problem 1: A company issues a 5-year, 4% coupon bond with a face value of $100,000. The effective market interest rate at the time of issuance is 2%. What are the proceeds from issuing the bond?

Option 1: $83,778

Option 2: $100,000

Option 3: $109,471

Option 4: $128,414

Option 5: $109,427

Problem 2: On 6/30/12, a company recorded a journal entry for the coupon payment on its bond. As part of the journal entry, the company credited bonds payable. Which of the following is true regarding this journal entry? (check all that apply)

Option 1: The coupon rate is greater than the effective rate

Option 2: The bond was issued at a discount

Option 3: The company debited Interest Expense

Option 4: The proceeds of the bond were less than the face value

Option 5: The company credited Cash

Reference no: EM132645989

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