Question

Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The amount paid to the bondholders for each semiannual interest payment is.

Answer 1

Answer: $33750

Explanation:

First and foremost, we have to calculate the interest paid for the year which will be:

= $750000 X 9%

= $750000 × 0.09

= $ 67500

Therefore, the semi annual payment will them be calculated as:

= $67500 / 2

= $33750