Market price of a bond issued at a discount

Assignment Help Accounting Basics
Reference no: EM13133043

The market price of a bond issued at a discount is the present value of its principal (face) amount at the market (effective) rate of interest:

a. Less the present value of all future interest payments at the market (effective) rate of interest.

b. Less the present value of all future interest payments at the rate of interest stated on the bond.

c. Plus the present value of all future interest payments at the market (effective) rate of interest.

d. Plus the present value of all future interest payments at the rate of interest stated on the bond.

Reference no: EM13133043

Questions Cloud

Probability that item selected for inspection is defective : The company has evidence that its line produces %0.9 of noncorforming items. What is the probability that an item selected for inspection is classified as defective?
Interest incurred in financing the construction of property : Which of the following is the recommended approach to handling interest incurred in financing the construction of property, plant and equipment?
Determining orthogonal vectors : For which values of k are the following vectors u and v orthogonal? Let u,v be orthogonal unit vectors. Prove that d(u,v) = 2^(1/2)
Compute the effective charges on the i and br atoms in ibr : Calculate the effective charges on the I and Br atoms in IBr, in units of the electronic charge e.
Market price of a bond issued at a discount : The market price of a bond issued at a discount is the present value of its principal (face) amount at the market (effective) rate of interest:
How much of retained earnings is available for dividends : Hutchinson Company had retained earnings of $10,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set ..
What was the noncontrolling interest share of sparis : At the end of each year, Gibson still owned 30% of the goods. Net income for Sparis was $912,00 during 2011. What was the noncontrolling interest's share of Sparis net income for 2011?
What proportion of connectors fail during warranty period : The probability of a failure during the warranty period is 5%.if 90% of the connector are kept dry and 10% are wet, What proportion of connectors fail during the warranty period?
What is the profit on this customer : A customer orders $30,000 worth of goods with direct costs of $24,000. The customer places 200 orders, orders 240 unique items, 1600 items, and makes 22 returns. What is the profit (loss) on this customer?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Accounting-relevance of budgeting

Discuss the relevance of budgeting as it relates to the accounting profession in general. Relate lessons learned from a self-selected reading or from something you learned while working on your accounting profession in general.

  At what amount would the bonds be issued

The Ness Company sells $5,000,000 of five-year, 10% bonds on January 1, 2011. The bonds have an effective yield of 9%.

  Calculate and journalize the foreign exchange

An error was discovered during 2007. Specifically, depreciation expense was understated in 2005 resulting in the need for a Prior Period Adjustment of $25,000 before taxes.

  Absorption costing-flexible budget for signet jewelers

Prepare a flexible budget for next year for Signet Jewelers using three different growth rates (assume absorption costing). Explain how you determined the three growth rates to use (the low, the average, the high). Explain how you adjusted all other ..

  Compensation expense relative to the options

In its year 2 financial statements, Gregory's on Ormond would recognize compensation expense relative to the options of how much?

  Predetermined overhead rate to the nearest cent

A company expected its annual overhead costs to be $900,000 and direct labor costs to be $1,000,000. Actual overhead was $870,000, and actual labor costs totaled $1,100,000. How much is the company's predetermined overhead rate to the nearest cent..

  Inventory management-order quantity for service level

Daily demand for a product is 100 units, with a standard deviation of 25 units. The review period is 10 days and the lead time is 6 days. At the time of review there are 50 units in stock.

  Overhead based on direct labor cost

During 2010, Durham Manufacturing expected to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Durham applied overhead based on direct labor cost.

  Barretts fashion forecasts sales

Barrett's fashion forecasts sales of 125,000 for the quarter ended december 31 Its gross profit reate is 20% of sales and its september 30inventory is 32,500 If the december 31 inventory is targeted at 41,500 budgeted purchases for the fourth quar..

  How will the development above effect the accounting

What are several possible explanations for the markdown and slow sale of common waleth Edison's bonds?

  Flexible budgets and standard costs

Compute the labor rate variance, the labor efficiency variance, and the total direct labor cost variance for October and for November.

  Describing statement of cash flows

A Statement of Cash Flow is the statement which demostrate inflow and outflows of cash and cash equivalents of an enterprise during the particular period.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd