BC Corporation purchased 5, $1,000, 6% bonds of Langley Corporation

Drab Corporation, a calendar year S corporation, had the following transactions during
February 11, 2020
The cash budget shows a surplus for the quarter, so we do not have to think about arranging any bank financing.” Comment on this statement.
February 11, 2020

BC Corporation purchased 5, $1,000, 6% bonds of Langley Corporation when the

market rate of interest was 8%. Interest is paid semiannually on the bonds, and the bonds mature in 5 years. 

Compute the total price paid by ABC Corporation for the bonds showing your calculation for the present value of the principal and the present value of the interest payments. 

 
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