A is corrent. The amount of cash received is equal to the selling price of the bond plus accrued interest if the bond is issued between interest dates. | Sales price (bonds were sold at
par) | $1,000,000 | | Accrued interest for 2 months
($1,000,000 × 10% × 2/12) | 16,667 | | | $1,016,667 |
B is incorrect. The amount of cash received is equal to the selling price of the bond plus accrued interest if the bond is issued between interest dates. | Sales price (bonds were sold at
par) | $1,000,000 | | Accrued interest for 2 months
($1,000,000 × 10% × 2/12) | 16,667 | | | $1,016,667 |
C is incorrect. The amount of cash received is equal to the selling price of the bond plus accrued interest if the bond is issued between interest dates. | Sales price (bonds were sold at
par) | $1,000,000 | | Accrued interest for 2 months
($1,000,000 × 10% × 2/12) | 16,667 | | | $1,016,667 |
D is incorrect. The amount of cash received is equal to the selling price of the bond plus accrued interest if the bond is issued between interest dates. | Sales price (bonds were sold at
par) | $1,000,000 | | Accrued interest for 2 months
($1,000,000 × 10% × 2/12) | 16,667 | | | $1,016,667 |
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