Question
Ripley Co. issued $250,000 of 10 year zero-coupon bonds. The market rate of interest is 5% at the time of issuance. After five years, the
Ripley Co. issued $250,000 of 10 year zero-coupon bonds. The market rate of interest is 5% at the time of issuance. After five years, the book value of the bonds on the company's books was $195,882. If the market rate of interest after five years was 6%, what was the approximate fair market value of the bonds?
A. $220,274
B. $225,000
C. $195,882
D. $186,815
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Cornerstones of Managerial Accounting
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman
2nd Canadian edition
978-0176721237, 978-0176530884
