Bond Issue Price A bond payable is dated January 1, 2010, and is issued on that date.

Question:

Bond Issue Price A bond payable is dated January 1, 2010, and is issued on that date. The of the bond is $100,000, and the face rate of interest is 8%. The bond pays interest semiannually. The bond will mature in five years.

Required
1. What will be the issue price of the bond if the market rate of interest is 6% at the time of issuance?
2. What will be the issue price of the bond if the market rate of interest is 8% at the time of issuance?
3. What will be the issue price of the bond if the market rate of interest is 10% at the time of issuance?

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...