On January 1, 2019, Bota Company issued a 3-year bonds with a face value of P5,000,000 at 99. The stated or nominal rate is 10% and the interest is payable annually on December 31. The entity paid a bond issue cost of P150,000 which should be deducted from the market price of the bonds to get the final price of the issuance. What is the effective or yield rate of the issuance?

On January 1, 2019, Bota Company issued a 3-year bonds with a face value of P5,000,000 at 99. The stated or nominal rate is 10% and the interest is payable annually on December 31. The entity paid a bond issue cost of P150,000 which should be deducted from the market price of the bonds to get the final price of the issuance. What is the effective or yield rate of the issuance?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

See similar textbooks