Company issued a 10%, 5-year bond with a P1,000,000 par value that pays interest annually. The bond was sold for P950,000. What is the interest rate of the bond in the market (round off your answer to two decimal places)?

Company issued a 10%, 5-year bond with a P1,000,000 par value that pays interest annually. The bond was sold for P950,000. What is the interest rate of the bond in the market (round off your answer to two decimal places)?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2EA: Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 3% when the...

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Company issued a 10%, 5-year bond with a P1,000,000 par value that pays interest annually. The bond was sold for P950,000.

What is the interest rate of the bond in the market (round off your answer to two decimal places)?

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