Answered: A 25-year bond issue of 4,400,000 and…

A 25-year bond issue of 4,400,000 and bearing interest at 4% payable annually is sold to yield 4.5% compounded semi -annually. What is the issue price of the bonds?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Concept explainers

Bond Valuation

Bond valuation are the notes issued by the corporation to raise long-term funds for the business. The corporations are required to pay the interest on such liabilities at a specified rate of interest (termed as coupon rate) at specified dates which may be on semi-annual or annual basis. These interest payments may be in the form of coupons.

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A 25-year bond issue of 4,400,000 and bearing interest at 4% payable annually is sold to yield 4.5% compounded semi
- annually. What is the issue price of the bonds?

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