A very stable and solvent company issued P10, 000.00, 8% debenture bonds for P10,700.00. If the bond pays interest yearly and will mature in 10 years, determine: a) the current yield; (Ans. 7.48%) b) the yield to maturity. (Ans. 7%)

A very stable and solvent company issued P10, 000.00, 8% debenture bonds for P10,700.00. If the bond pays interest yearly and will mature in 10 years, determine: a) the current yield; (Ans. 7.48%) b) the yield to maturity. (Ans. 7%)

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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Question

A very stable and solvent company issued P10, 000.00, 8% debenture bonds for P10,700.00. If the bond pays interest yearly and will mature in 10 years, determine:

a) the current yield; (Ans. 7.48%)

b) the yield to maturity. (Ans. 7%)

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