On June 30, 2019, Gaston Corporation sold $800,000 of 11% face value bonds for $761,150.96. On December

Question:

On June 30, 2019, Gaston Corporation sold $800,000 of 11% face value bonds for $761,150.96. On December 31, 2019, Gaston sold $700,000 of this same bond issue for $734,645.28. The bonds were dated January 1, 2019, pay interest semiannually on each December 31 and June 30, and are due December 31, 2026.

Required:
Compute the effective yield rate on each issuance of Gaston’s 11% bonds.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...

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