A company has issued a $20,000, 10 year bond. Each bond pays interest quarterly of 2%. Determine the amount a purchaser has to pay for the bond, if it yield a 12% compounded quarterly. O a. PW = $32,000 Ob. PW = $31, 902 OC. PW = $15,378 Od. PW = $28,000

A company has issued a $20,000, 10 year bond. Each bond pays interest quarterly of 2%. Determine the amount a purchaser has to pay for the bond, if it yield a 12% compounded quarterly. O a. PW = $32,000 Ob. PW = $31, 902 OC. PW = $15,378 Od. PW = $28,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...

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Question

A company has issued a $20,000, 10 year bond. Each bond pays interest quarterly of 2%. Determine the amount a
purchaser has to pay for the bond, if it yield a 12% compounded quarterly.
a. PW = $32,000
b. PW = $31, 902
OC. PW = $15,378
d. PW = $28,000

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