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    Solving for Cash Interest

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    Question: Hooker Company sells $200,000 of ten-year, 8% bonds to yield 10% on January 1, 2005. The bonds pay interest annually on December 31. The bonds were sold at a discount of $24,578. The amount of cash interest paid in 2005 on the bonds is ?

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    The cash interest paid is computed by multiplying the face value of the bonds by the stated interest rate. Thus the figures to use are the ...

    Solution Summary

    In just under 100 words, this solution explains how to calculate the amount of cash interest on a particular bond. All calculations are provided.