On January 1, 2009, Mango Corporation Issued a 3-Year, 4

question 102

Essay

On January 1, 2009, Mango Corporation issued a 3-year, 4%, $3,000 bond payable. Beginning in 2010, interest is payable every year on January 1 over the life of the bond. The market rate of interest on January 1, 2009 is 6%. What are the proceeds received by Mercer from the issue of this bond on January 1, 2009?

---

Definitions:

Cash Flows

The total amount of money being transferred in and out of a business, especially as affecting liquidity.

Cash Dividend

A payment made by a company to its shareholders, usually as a distribution of profits.

Operating Activities

Transactions and events that directly affect the financial position of a company, primarily related to its core business operations.

Comparative Balance

A financial statement that presents balances of accounts or financial metrics at different points in time for comparison.