What is the sales price for this bond

Assignment Help Financial Accounting

Reference no: EM133265097

On January 1, Year One, Big Company offers to sell a $100,000 bond coming due in exactly 10 years. According to the contract, this bond pays cash interest of 4% at the end of each year. A buyer is found who wants to earn 5% interest each year. After some negotiations, Big agrees to the 5% effective yield rate. What is the sales price for this bond?

Reference no: EM133265097

Questions Cloud

Creative a letter of demand : On the 15 April 2021, the board sent Creative a letter of demand. On the 30 April 2021, a director of Creative wrote back.

Describe visual aid that you add to your persuasive speech : Describe a visual aid that you will add to your persuasive speech. How do you plan to incorporate, it and why would you like to add a visual aid

Calculate bad debt expense for the year : Calculate bad debt expense for the year and Calculate the year-end balance in the allowance for uncollectible accounts

Create a paragraph about the history of systems : Create a paragraph about the history of systems of linear equations in two variables and their importance in mathematics

What is the sales price for this bond : who wants to earn 5% interest each year. After some negotiations, Big agrees to the 5% effective yield rate. What is the sales price for this bond

Explain academic integrity and how you are prepared : Academic Integrity Discussion - Explain academic integrity and how you are prepared to meet the academic integrity standards at college

What is the doctrine of ''utmost good faith : What is the doctrine of 'utmost good faith'. Why is the doctrine of 'utmost good faith' so important in insurance contracts?

Determine the total interest expense recognized at the end : The term of the bonds is 2 years, so $500,000 in principal is repaid at the end of each year. Determine the total interest expense recognized at the end

What factors led to the troubles of the group psa : What factors led to the troubles of the Group PSA in the 1990s and What can PSA gain by entering the US market?

User Account

All Pages