Can you explain the formula you used in C3?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Can you explain the formula you used in C3?
Expert Solution
Step 1: Understanding of premium or discount on issue of bond
Lets understand the basics.
When bond is issued for more than its face value then bond is known to be issued at premium.
Onother hand if bond is issued for less than its face value then bond is known the be issued at discount.
However if bond is issued for same price as face value then bond is known to be issued at par value.
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