On January 2, 2010, Wine Corporation wishes to issue $2,000,000 (par value) of its 8%, 10-year bonds. The bonds pay interest annually on January 1. The current yield rate on such bonds is 10%. Using the interest factors below, compute the amount that Wine will realize from the sale (issuance) of the bonds.

a $2,000,012


b $1,754,136


c $2,212,052


d $2,000,000

On June 8, Alto Co. issued an $90,000, 6%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note?

wht?

To calculate the amount that Wine Corporation will realize from the sale (issuance) of the bonds, we need to consider the par value of the bonds and the current yield rate.

Step 1: Calculate the annual interest payment
The annual interest payment can be calculated using the formula: Par Value * Interest Rate = Annual Interest Payment.
In this case, the par value is $2,000,000 and the interest rate is 8%. Therefore, the annual interest payment is $2,000,000 * 8% = $160,000.

Step 2: Calculate the bond price
To calculate the bond price, we will use the formula: Bond Price = (Annual Interest Payment) / (Current Yield Rate)
In this case, the annual interest payment is $160,000 and the current yield rate is 10%. Therefore, the bond price is $160,000 / 10% = $1,600,000.

Step 3: Calculate the amount Wine will realize from the sale (issuance) of the bonds
The amount that Wine will realize from the sale of the bonds is equal to the bond price plus the par value of the bonds.
In this case, the bond price is $1,600,000 and the par value is $2,000,000. Therefore, the amount that Wine will realize is $1,600,000 + $2,000,000 = $3,600,000.

Therefore, none of the given options (a, b, c, or d) are correct. The correct answer should be $3,600,000.