An investor purchased a bond for $1,000, received $11 in interest, and then sold the bond for $1,067 after holding it for seven months. What is the holding period return?
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- Bonds pay the face value to the investor when they are a. held over 10 years. b. held 20 years. c. held until maturity. d. sold on the market before maturity.According to the theory, premium bonds, discount bonds, and face value bonds at the expiry date will have a value of $1,000. Why is the value is $1,000 at the expiring day? Explain.An investor purchased a bond 45 days ago for $985. He received $15 in interest and sold the bond for $980. What is the holding-period return on his investment? A. 1.92% B. 1.02% C. 0.50% D. 0.01%
- An investor buys a bond for $10,000. The bond pays $200 interest every six months. After 18 months, the investor sells the bond for $9,500. Describe the types of income and/or loss the investor had.What is the amount of bond interest expense for the first year?What is the net cash received over the life of the bond investment?
- What is the journal entry for the redemption of the bond? A Loss on bond redemption $4K B Gain on bond redemption $4K C Loss on Bond Redemption $2KAn investor purchases a 15-year, $100,000 par value bond that pays semiannual interest of $4,000. If the semiannual market rate of interest is 5%, what is the current market value of the bond? $89,620.34 $100,000.00 $84,627.55 $79,568.15Assume you purchased a high-yield corporate bond with a face value of $1,000 at its current market price of $856. It pays 5.06 percent interest and will mature in eight years. a. Determine the current yield on your bond investment at the time of purchase. Note: Enter your answer as a percent rounded to 2 decimal places. b. Determine the yield to maturity on your bond investment at the time of purchase. Note: Enter your answer as a percent rounded to 2 decimal places.
- A $500,000 bond issue on which there is an unamortized discount of $35,000, is redeemed for $475,000. What journal entry would you make to record the redemption of the bond? Make it below:Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?Irving Inc. sold bonds with a $50,000, 10% interest, and 10-year term at $52,000. What is the total amount of interest expense over the life of the bonds?