Swifty Corporation issued $420000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year? $443100 O $436800 O $438900 O $441000

Swifty Corporation issued $420000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year? $443100 O $436800 O $438900 O $441000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 10EA: Pinetop Corporation issued $150,000 10-year bonds at par. The bonds have a stated rate of 6% and pay...

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Swifty Corporation issued $420000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization,
what is the carrying value of the bonds after one year?
O $443100
O $436800
O $438900
O $441000

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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