A corporation purchased a bond issued by an oil company with face value of 1000000 on Dec 31, 2020. The 3 year bond is purchased at 973357.23 to yield a market rate of 7%. the bond has a coupon rate of 6% p.a. paid semi annually every june 30 and dec 31. the corporation purchased the investments with the sole objective of collecting interests and principal payments and intend to hold this investment until maturity date. the market price on december 31 2021 was 99 on 100 on dec 2022. how much interest revenue will the corporation record on each of the interest payment date?

A corporation purchased a bond issued by an oil company with face value of 1000000 on Dec 31, 2020. The 3 year bond is purchased at 973357.23 to yield a market rate of 7%. the bond has a coupon rate of 6% p.a. paid semi annually every june 30 and dec 31. the corporation purchased the investments with the sole objective of collecting interests and principal payments and intend to hold this investment until maturity date. the market price on december 31 2021 was 99 on 100 on dec 2022. how much interest revenue will the corporation record on each of the interest payment date?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
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