Question

On May 1, Pierce Company purchased $60,000 of Stanton Company’s 12% bonds at 100 plus accrued interest of $2,400. On June 30, Pierce received its first semiannual interest. On February 1, Pierce sold $50,000 of the bonds at 103 plus accrued interest.What are the total proceeds from the February 1 sale?

Answer 1

Answer:

Total proceeds = 52000

Explanation:

given data

purchased = $60,000

rate = 12 %  = 0.12

sold = $50,000

accrued interest = $2,400

solution

we get here Total proceeds that will be express as  

Total proceeds = [ sold × accrued interest ] + [ sold ×  rate  × 1 ]   ................1

put here value in equation 1 and we will get

Total proceeds = [ 50000 × 1.03 ] + [ 50000 × $\frac{.12}{12}$ × 1 ]

Total proceeds = 51500 + 500

Total proceeds = 52000