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Question 2. (5%) A bond payable is dated January 1, 2020, and is issued on that date. The face value of the bond is $200,000,
Question 2. (5%) A bond payable is dated January 1, 2020, and is issued on that date. The face value of the bond is $200,000, and the face rate of interest is 8%. The bond pays interest semiannually and the bond will mature in 4 years. (a) Calculate the issue price of the bond if the market rate of interest at the time of issuance is (Show all your calculations): 1. 6% 2. 8% 3. 10% (b) Briefly describe the relationship between the market rate of interest and the bond issuance price. No calculations needed
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