Which of the following is considered the principal when figuring interest for a bond? effective interest rate face of the bond life of bond none of these

Q: What does a bond issue's "call" feature entail? What effect does the call feature have on bond…

A: This question deals with the "call" feature of a bond issuance entails and the call feature's effect…

Q: Which of the following statements is true regarding bond anticipation notes?

A: A bond is a type of financial security in which the issuer owes the holder a debt and is obligated –…

Q: What effect do interest rates have on bond prices? What are the underlying assumptions that go into…

A: Bond: Bond refers to debt security issued by the company from the debt investors to raise capital.…

Q: In general, how is the rate on a floating-rate bond determined?

A: The bond that changes in interest entirety in line with market interest rates or a few other…

Q: Under what conditions of bond issuance does a discounton bonds payable arise? Under what conditions…

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Q: Compare the two commonly used methods of determining interest on bonds.

A:

Q: What effect does collateral have on a bond's interest rate? What effect does subordination have on a…

A: There are various factors that impact a bond's price. We discount back the future cash flows of a…

Q: How do interest rates affect bond valuations? What are the key assumptions in valuing a bond?

A: Bonds are the form of debt payable by the company. Interest rates on bonds to be paid is coupon…

Q: Will the amortization of Discount on Bonds Payableincrease or decrease Bond Interest Expense?…

A: There will be an increase in the interest expense due to the amortization of discount on bonds…

Q: When a bond is issued, what is its present value?

A: The present value of the bond is the total of the present value of the bond's interest payments that…

Q: What is the principal repayment for a bond

A: There are two components principal and interest

Q: what is the required method of amortizing discount and premium on bonds payable? Explain the…

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Q: Which features make a bonds interest increase at issuance?

A: Bonds - Bonds are the money borrowed for a fixed duration for fixed rate of interest.

Q: What is the difference between the stated interest rate andthe market interest rate on a bond?

A: Interest: It can be defined as the cost that is paid by the borrower for using the money borrowed…

Q: what is the principal amount repaid at the maturity of a bond is called?

A: Bond is a debt instrument which is issued by corporates or governments to raise funds for any…

Q: What amount of interest is expensed on a bond interest payment?

A: Whenever an interest payment is made on bonds, amount of interest expensed : Interest expensed =…

Q: What relationship exists between bond prices and interest rates? Describe the circumstances behind…

A: Introduction : Bonds are debt instruments issued by governments and significant enterprises to raise…

Q: How is the price determined for a bond (or bond issue)?

A:

Q: Why is it necessary to amortize the discount and premium on bond issues?

A: Introduction:   Bonds may be sold at a discount, at a premium, or at face value.

Q: how to differentiate between:  premium bonds discounted bonds bonds at par?

A: Premium Bonds: A premium bond is a bond that trades in the secondary market at a price higher than…

Q: In regard to a bond discount or premium, what is the effective-interest amortization method?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: Each bond differs with respect to risk and expected return. Differentiate between treasury bonds,…

A: Bonds are the fixed income investment instruments that are issued by the corporations or government…

Q: How does collateral affect the interest rate on a bond? How does subordination affect the interest…

A: The interest rate on a bond is affected by many factors like collateral, subordination, etc.

Q: What is the straight-line amortization approach with regards to a bond discount or premium?

A: Bond with a straight-line amortization schedule: The straight-line amortization technique is a way…

Q: When does a premium on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: What is the relationship between bond price and interest rate? Describe in fully how this…

A: Bonds are referred to as those investment securities which are issued by companies as units of…

Q: In regard to a bond discount or premium, what is the straight-line amortization method?

A: Straight-line amortization bondStraight line method of amortization is a process of amortizing…

Q: What is the difference between serial bonds, term bonds, callable bonds, and convertible bonds.

A: Bonds are securities which are issued for specified period and bear fixed interest payable on the…

Q: Two interest rates are associated with pricing a bond.  Name and describe each.  How are they used ?

A: A bond is a debt instrument with which a shareholder credits cash to an entity, which can be a…

Q: Describe the process to record a bond a face value, discount value and premium?

A: Bonds payable are financial instruments. It representing a company’s commitment to pay back a…

Q: Define a floating-rate bond and give examples

A: Floating-rate bond is a bond pays a variable interest rate.  The interest rate is depends on a…

Q: A bond that has only one payment, which occurs at maturity, defines which one of these types of…

A: One payment which occurs at maturity means only principle amount of bonds are refunded and no coupon…

Q: How do you compute Macaulay's duration on a bond?

A: FORMULA TO CALCULATE Macaulay's duration on a bond DMacaulay's=∑T=1NC×T1+rT+M×N1+rNpricewhere,C =…

Q: What is the effective-interest amortization mechanism for a bond discount or premium?

A: Method of interest amortization that is effective: Interest expenditure is calculated as follows:…

Q: What is the straight-line amortization technique for a bond discount or premium?

A: Bond with a straight-line amortization schedule The straight-line amortization technique is a way of…

Q: What are the methods of determining interest on bonds?

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: When a bond is held with the objective of collecting principal and interest payments over the life…

A: As per IFRS 9, Financial instruments Standard  The Financial assets can be classified at Amortized…

Q: What are two important characteristics that determine the issuance price of a bond?

A: Following are the two characteristics that determine the issuance price of a bond: The riskiness of…