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Problem #1 a. Calculate the selling price of the following 10-year bond issue: # bonds 700 Bond rate of interest 5.4% Interest payable semi-annually Market
Problem #1 | ||||||
a. | Calculate the selling price of the following 10-year bond issue: | |||||
# bonds | 700 | |||||
Bond rate of interest | 5.4% | |||||
Interest payable | semi-annually | |||||
Market rate of interest | 5.0% | |||||
Bond maturity (face) value | $1,000 | |||||
b. | record the bond issue described in part (a) | |||||
c. | for bonds in part (a) record the first TWO semi-annual interest payment and | |||||
amortization using the effective interest method | ||||||
d. | for bonds in part (a) record the FIRST semi-annual interest payment and | |||||
amortization using the straight-line method method | ||||||
e. | Calculate the selling price of the following 5-year bond issue: | |||||
# bonds | 600 | |||||
Bond rate of interest | 5.8% | |||||
Interest payable | semi-annually | |||||
Market rate of interest | 6.0% | |||||
Bond maturity (face) value | $1,000 | |||||
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