Insouciance, Inc. (President, John Carefree) issued $200,000, 8% coupon bond on January 1, 2010, due on December 31, 2014. The prevailing market interest rate on January 1, 2010 was 10%, and the bond pays interest on December 31 of each. Consider the following (incomplete) table for the bond's carrying value (CV) Dec 31, 2012 ? Dec 31, 2013 ? CV Required: a. Calculate the price of the bond b. Calculate the missing CV c. How much interest expense did Insouciance record in 2013?
Insouciance, Inc. (President, John Carefree) issued $200,000, 8% coupon bond on January 1, 2010, due on December 31, 2014. The prevailing market interest rate on January 1, 2010 was 10%, and the bond pays interest on December 31 of each. Consider the following (incomplete) table for the bond's carrying value (CV) Dec 31, 2012 ? Dec 31, 2013 ? CV Required: a. Calculate the price of the bond b. Calculate the missing CV c. How much interest expense did Insouciance record in 2013?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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