Question
A $9,000, 10% bond redeemable at par in two years with semi-annual coupons is purchased to yield 9% compounded semi-annually. Compute the premium or discount
A $9,000, 10% bond redeemable at par in two years with semi-annual coupons is purchased to yield 9% compounded semi-annually. Compute the premium or discount and the purchase price, and construct the appropriate bond schedule.
The premium is $161.44161.44.
The purchase price of the bond is $9161.449161.44.
Calculate the schedule. Round each answer to the nearest cent.
| End of Interest Payment Interval | Bond Interest Received (Coupon) b=5% | Interest on Book Value at Yield Rate i=4.5% | Amount of Premium Amortized | Book Value of Bond | Remaining Premium |
| 0 | 9,161.44 | 161.44 | |||
| 1 | 450.00 | nothing | nothing | nothing | nothing |
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Auditing A Business Risk Approach
Authors: Larry E. Rittenberg, Karla Johnstone, Audrey Gramling
7th Edition
0324663722, 978-0324663723
