Question

On July 1, 2010, Washington Post paid the par value of $100,000 for 8 percent bonds that mature on June 30, 2015 . Interest at 8 percent is paid each June 30 and December 31. . When the bonds mature on June 30, 2015, the journal entry to record receipt of the principal payment would be:

Answer 1

Answer:

$146.932,81    

Explanation:

You have to calculate the number of years that you have to keep the bond to mature, the answer is 5 years that is the difference between the two dates, now you have to calculate with the interest compound formula the future value of the bond so you have to use the next formula:

Future value = amount of money *((1+ interest rate)^(n))

Where n correspond to the number of years

Note: The interest rate is 8% but is paid each 6 months, it's a reason why you have to multiply n plus 2.

n= 5* 2

n= 10

FV= 100.000*((1+8%)^(10))  

FV = $215.892,50  

According with the information the bond will pay $215.892,50