Questions 1) The value (not par value) of the bond at issue date is what? 2) AT
Question:
Questions
1) The value (not par value) of the bond at issue date is what?
2) AT each interest payment date cash is increased or decreased by this amount?
3) interest expense at the SECOND interest payment date is
4) amortization of the discount/premium at the THIRD interest payment date is
5) At the date of call the re-acquisition price of the bond is what?
Data
Number of bonds 3,000
Effective interest rate 5%
Par value of each bond $3,000
Interest Paid Per Year 2 times (semi-annual)
Stated interest rate 4%
Payment dates January 1st, July 1st
Issue date 1/1/20X2
Years to maturity 5 years
Due date 12/31/20X6
Call % 101%
Called on 1/1/X6
Un-amortized at call date equals = $86735
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson