B is corrent. $200,000 of bonds are issued at 98 plus accrued interest (3 months, from January 1 to April 1). The cash received for the bonds is 98% of $200,000, or $196,000. The cash received for the accrued interest is $5,000 ($200,000 x 10% x 3/12). Therefore, cash receipts total $201,000 ($196,000 + $5,000).
A is incorrect. $200,000 of bonds are issued at 98 plus accrued interest (3 months, from January 1 to April 1). The cash received for the bonds is 98% of $200,000, or $196,000. The cash received for the accrued interest is $5,000 ($200,000 x 10% x 3/12). Therefore, cash receipts total $201,000 ($196,000 + $5,000).
A is incorrect. $200,000 of bonds are issued at 98 plus accrued interest (3 months, from January 1 to April 1). The cash received for the bonds is 98% of $200,000, or $196,000. The cash received for the accrued interest is $5,000 ($200,000 x 10% x 3/12). Therefore, cash receipts total $201,000 ($196,000 + $5,000).
D is incorrect. $200,000 of bonds are issued at 98 plus accrued interest (3 months, from January 1 to April 1). The cash received for the bonds is 98% of $200,000, or $196,000. The cash received for the accrued interest is $5,000 ($200,000 x 10% x 3/12). Therefore, cash receipts total $201,000 ($196,000 + $5,000).
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