The Biltmore National Bank raised capital through the sale of $140 million face value of eight percent coupon rate, ten-year bonds. The bonds paid interest semiannually and were sold at a time when equivalent risk-rated bonds carried a yield rate of ten percent.

the market price of the bonds:

PV of face value = $140 / (1 + 5%)²⁰ = $52.765 million

PV of coupon payments = ($140 x 4%) x 12.462 (PV annuity factor, 5%, 20 periods) = $69.787 million

total market value = $122.552 million

Journal entry to record bond issuance:

Dr Cash 122,552,000

Dr Discount on bonds payable 17,448,000

    Cr Bonds payable 140,000,000

twenty-six miles over two gallons because the proportion for the original 13 miles to one gallon would be written 13/1 and, doing the same thing to the top and bottom, i multiplied by 2 and got 26/2