A $10 000 bond bearing interest at 5% payable semi-annually is redeemable at par on August 04, 2035. The bond is sold on March 24, 2021, to yield 5.3% compounded semi-annually. How much is the bond sold for?

A $10 000 bond bearing interest at 5% payable semi-annually is redeemable at par on August 04, 2035. The bond is sold on March 24, 2021, to yield 5.3% compounded semi-annually. How much is the bond sold for?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Concept explainers

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:

Question

100%

A $10 000 bond bearing interest at 5% payable semi-annually is
redeemable at par on August 04, 2035. The bond is sold on
March 24, 2021, to yield 5.3% compounded semi-annually. How
much is the bond sold for?
B
I
2:
II
!!

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