Two bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be: Bond ABond BA.$739.29$1,174.03B.$740.61$1,172.04C.$739.29$1,192.04

Bond is financial security used by organizations to raise debt funds. Bond carries fixed coupon that…

Answered: Two bonds have par values of $1,000.…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...

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Two bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be:

	Bond A	Bond B
A.	$739.29	$1,174.03
B.	$740.61	$1,172.04
C.	$739.29	$1,192.04

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