On January 1, 2016, Mango Corporation Issued a 3-Year, 4

question 38

Essay

On January 1, 2016, Mango Corporation issued a 3-year, 4%, $3,000 bond payable. Beginning in 2017, interest is payable every year on January 1 over the life of the bond. The market rate of interest on January 1, 2016 is 6%. What are the proceeds received by Mercer from the issue of this bond on January 1, 2016?

---

Definitions:

Operation of Law

Describes a legal process that occurs automatically due to established legal rules, without the need for action by any party.

Dissolution

The process of legally ending the existence of a corporation, partnership, or other legal entity.

Winding-Up Process

A formal procedure in which a company's assets are liquidated and liabilities are paid off before the company is dissolved.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another. The obligated party is typically in a position of trust, such as a financial advisor or trustee.