Annapolis Company purchased a $4,000, 4%, 7-year bond at 101 and held it to maturity. The...
Annapolis Company purchased a $4,000, 4%, 7-year bond at 101 and held it to maturity. The straight line method of amortization is used for both premiums & discounts. What is the net cash received over the life of the bond investment? (all money received minus all money paid, round to nearest whole dollar)
Homework Answers
Net cash received = Amount received on maturity + Interest received - purchase price
= $4000 + 4000*4%*7 + 4000*101%
= $1080
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