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HKUST Inc. issued a bond on January 1 st , 2019 with a market interest rate (yield) of 11%. However, HKUST Inc. decided to pay
HKUST Inc. issued a bond on January 1st, 2019 with a market interest rate (yield) of 11%. However, HKUST Inc. decided to pay a coupon rate of 9%. The face-value of the bond was 10,000 dollars. This bond will be due on December, 31st, 2020 and will be paid semi-annually.
Required: Record the above bond transaction with a) straight-line method and b) effective interest method. Explain their differences.
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