On July 1, Year 5, Eagle Corp. issued 600 of its 10%, $1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, Year 5 and mature on April 1, Year 15. Interest is payable semiannually on April 1 and October 1. What amount did Eagle receive from the bond issuance?

E) $609,000

Explanation:

amount received by Eagle Corp. = bond selling price + accrued interest

= (bond price x quantity of bonds x face value) + (interest x months x quantity of bonds x face value) =

= (0.99 x 600 bonds x $1,000 per bond) + (10% x 3/12 x 600 bonds x $1,000 per bond)

= $594,000 + $15,000 = $609,000