Citywide Company issues bonds with a par value of $150,000. The bonds mature in five years and
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Citywide Company issues bonds with a par value of $150,000. The bonds mature in five years and pay 10% annual interest in semiannual payments. The annual market rate for the bonds is 8%.
1. Compute the price of the bonds as of their issue date.
2. Prepare the journal entry to record the bonds’ issuance.
Par ValuePar value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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1 Estimation of the market price at the issue date Cash Flow Table TableValue Amount Presen...View the full answer
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