survey of accounting
posted by ravi .
1. A corporation issues $18,000,000 of 6% bonds to yield an effective interest rate of 7%.
a) was the amount of cash received from the sale of the bonds more or less than $18,000,000?
b) identify the following amounts related to the bond issue: 1) face amount, 2) market rate of interest, 3)contract rate of interest, and 4) maturity amount.
The ______ interest rate is used to calculate the regular interest payments made to the bond holder.