(E12 3) On January 1, 2004, A J Corporation issues a $10,000bond with a 6 annual coupon The bond matures five years from the date of issue The bond is issued to yield an 8 return to investors, selling for $9,201 43 d What will be the economic value of the bond on December 31, 2004, assuming no change in market interest rates e How will the bond be presented on the balance sheet on December 31, 2004 f What will be the amount of the net bond liability on December 31, 2008, the day before the bond matures g Prepare the entry that will be made on January 1, 2009, the maturity date of the bond

Question

(E12 3) On January 1, 2004, A J  Corporation issues a $10,000bond with a 6  annual coupon  The bond matures five years from the date of issue  The bond is issued to yield an 8  return to investors, selling for $9,201 43  d  What will be the economic value of the bond on December 31, 2004, assuming no change in market interest rates  e  How will the bond be presented on the balance sheet on December 31, 2004  f  What will be the amount of the net bond liability on December 31, 2008, the day before the bond matures  g  Prepare the entry that will be made on January 1, 2009, the maturity date of the bond

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Question

(E12-3) On January 1, 2004, A.J. Corporation issues a $10,000bond with a 6% annual coupon. The bond matures five years from the date of issue.

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