Question
On January 1, 2020, you bought a bond with the following features: Face Value = $500,000 Redemption Value = $550,000 Coupon rate = 6%, convertible
On January 1, 2020, you bought a bond with the following features:
Face Value = $500,000 Redemption Value = $550,000 Coupon rate = 6%, convertible semiannually Coupons are paid on June 30 and December 31 Call Date:None Maturity Date: 12/31/2029 You bought the bond at a discount of $30,000.
a. (2 points) What price did you pay for the bond? b. (2 points) What is the nominal yield-to-maturity convertible semiannually associated with the price you paid for the bond? c. (3 points) What is the interest portion of the coupon to be paid on June 30, 2022? d. (1 points) You decide to sell the bond two months after the last coupon payment in 2020.Using the practical method, what is your accrued coupon on the sale date?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To calculate the price paid for the bond we need to subtract the discount from the face value Pric...
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Intermediate Accounting IFRS
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
3rd edition
1119372933, 978-1119372936
