Mr. Humaira Ali Khushk issued most recently (1st January 2012) 9% bond payable in 5 Year with Annual Interest Payment on 1st January Every year. Par Value of Bond is Rs, 100,000 and Market or Competitors have issued similar risky bond on 7% interest rate per annum. Required: Calculate Market or Intrinsic Price of Bond. With help of Market value and given data, calculate per year Amortization of Premium or Discount on Bond by straight line method. Prepare all necessary Journal entries from January 01, 2012 to January 01, 2017. Hint: You can take help from internet sources for calculating Market or intrinsic Price of Bond & Effective interest rate or Reducing Balance Method

Mr. Humaira Ali Khushk issued most recently (1st January 2012) 9% bond payable in 5 Year with Annual Interest Payment on 1st January Every year. Par Value of Bond is Rs, 100,000 and Market or Competitors have issued similar risky bond on 7% interest rate per annum. Required: Calculate Market or Intrinsic Price of Bond. With help of Market value and given data, calculate per year Amortization of Premium or Discount on Bond by straight line method. Prepare all necessary Journal entries from January 01, 2012 to January 01, 2017. Hint: You can take help from internet sources for calculating Market or intrinsic Price of Bond & Effective interest rate or Reducing Balance Method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A $23,000 bond redeemable at par on September 01, 2013 is purchased on April 17, 2002. Interest is 7.4% payable semi-annually and the yield is 7.2% compounded semi-annually. (a) What is the cash price of the bond? (b) What is the accrued interest? (c) What is the quoted price? (a) The cash price is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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