Question
TR issues 6.9% , 5-year bonds with a total face amount of $1,000,000 . The market interest rate for bonds of similar risk and maturity
TR issues 6.9%, 5-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 6.8%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after youve completed the entire problem).
4. $___________ (rounded to nearest dollar). What is the issue price of the bond?
5. $___________ (rounded to nearest dollar). When the company records the first interest payment, how much will the company record for interest expense?
6. $___________ (rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest payment?
7. $___________ (rounded to nearest dollar). When the company records the second interest payment, how much will the company record for interest expense?
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Financial Markets And Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
7th Edition
013213683X, 978-0132136839
