On February 1, 2019, Target issued a $500.000, 4% annual coupon bond to be paid on...

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On February 1, 2019, Target issued a $500.000, 4% annual coupon bond to be paid on a quarterly basis. The bond matures on February 1. 2024. At the time of issue, the market yield was 5%. Answer the following questions. Round your answer to two decimals. 1. (5 points) Was this bond issued at a premium or discount (write "premium" or "discount"]? 2. (5 points) What was the price of the bond at the time of issue (February 1, 2019)? 3. (5 points) What is the price of the bond immediately after the fifth coupon payment? 4. (5 points) What amount will Target record as the interest expense associated with the bond when it makes its sixth coupon payment? 5. (5 points) What is the unamortized premium or discount balance following the payment of the sixth coupon (do not include decimals)? 6. (5 points) Assume that Target decides to buy back this bond February 1, 2022 after it pays its coupon for that quarter at a price of 97. Does Target recognize a gain or loss on its bond buyback (enter one of Gain/Loss as your answer) ? By how much (enter the rounded amount only with no decimals and no signs)? On February 1, 2019, Target issued a $500.000, 4% annual coupon bond to be paid on a quarterly basis. The bond matures on February 1. 2024. At the time of issue, the market yield was 5%. Answer the following questions. Round your answer to two decimals. 1. (5 points) Was this bond issued at a premium or discount (write "premium" or "discount"]? 2. (5 points) What was the price of the bond at the time of issue (February 1, 2019)? 3. (5 points) What is the price of the bond immediately after the fifth coupon payment? 4. (5 points) What amount will Target record as the interest expense associated with the bond when it makes its sixth coupon payment? 5. (5 points) What is the unamortized premium or discount balance following the payment of the sixth coupon (do not include decimals)? 6. (5 points) Assume that Target decides to buy back this bond February 1, 2022 after it pays its coupon for that quarter at a price of 97. Does Target recognize a gain or loss on its bond buyback (enter one of Gain/Loss as your answer) ? By how much (enter the rounded amount only with no decimals and no signs)?

Answer rating: 100% (QA)

Answer1 The bond is issued at discount of 21999 Explanation Answer... View the full answer