The board of directors are planning to issue bonds in the amount of KD 14,000,000. The...
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The board of directors are planning to issue bonds in the amount of KD 14,000,000. The bonds will have an annual stated interest rate of 5% and the market rate will be 4%. The bonds will be issued for a period of 10 years, and the payments are expected to be at the end of each 6 month period. Required: Calculate the bond's current market value AND prepare the necessary journal entry for the bond's issuance. (SHOW YOUR WORK) The board of directors are planning to issue bonds in the amount of KD 14,000,000. The bonds will have an annual stated interest rate of 5% and the market rate will be 4%. The bonds will be issued for a period of 10 years, and the payments are expected to be at the end of each 6 month period. Required: Calculate the bond's current market value AND prepare the necessary journal entry for the bond's issuance. (SHOW YOUR WORK)
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To calculate the bonds current market value well need to calculate the present value of the bonds fu... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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