A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable quarterly has a maturity date of 30 years from the date of issue. If the bond was issued 10 years ago and an investor wishes to make a rate of return of at least 12% per year, compounded quarterly, the amount the investor should pay for the bond is approximately 1) $6,000

A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable quarterly has a maturity date of 30 years from the date of issue. If the bond was issued 10 years ago and an investor wishes to make a rate of return of at least 12% per year, compounded quarterly, the amount the investor should pay for the bond is approximately 1) $6,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2PB: Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity...

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A company issued bonds with a $100,000 face value, a 5-year term, a stated rate of 6%, and a market rate of 7%. Interest is paid annually. What is the amount of interest the bondholders will receive at the end of the year?
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.
Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
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