Assume that the bonds in exercise 1 do not pay periodic interest and that the market rate of return on the date of issue was 7.50%. 1. At what price were the bonds issued? 2. What is the interest expense for the second year? 3. What is the carrying value of the bonds at the end of the seventh anus? price of bond, 216140.5 A company issued term bonds with a par value of $ 200,000, a life of 10 years and a nominal rate of 7.40% per annum. The bonds pay interest every six months.
Assume that the bonds in exercise 1 do not pay periodic interest and that the market rate of return on the date of issue was 7.50%. 1. At what price were the bonds issued? 2. What is the interest expense for the second year? 3. What is the carrying value of the bonds at the end of the seventh anus? price of bond, 216140.5 A company issued term bonds with a par value of $ 200,000, a life of 10 years and a nominal rate of 7.40% per annum. The bonds pay interest every six months.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that the bonds in exercise 1 do not pay periodic interest and that the market rate of return on the date of issue was 7.50%.
1. At what price were the bonds issued?
2. What is the interest expense for the second year?
3. What is the carrying value of the bonds at the end of the seventh
anus?
price of bond, 216140.5
A company issued term bonds with a par value of $ 200,000, a life of 10 years and a nominal rate of 7.40% per annum. The bonds pay interest every six months.
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