A bond with a face value of $10,000 is issued at a discount of $800 on January

Question:

A bond with a of $10,000 is issued at a discount of $800 on January 1, 2012. The face rate of interest on the bond is 7%.
Required
1. Was the market rate at the time of issuance greater than 7% or less than 7%?
2. If a is presented on January 1, 2012, how will the bonds appear on the If a is presented on December 31, 2012, will the amount for the bonds be higher or lower than on January 1, 2012?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...