Yorick purchases a bond with a $$1\mathrm{}2,000$ face value and a $5$ percent interest rate from Hamlet on March $31,2023.$ The bond pays interest semiannually on June $30$ and December $31.$ Prevailing interest rates have risen since Hamlet first purchased the bond for $$10,000$ at issuance and so Yorick pays $$9,561$ for the bond. What two items are affecting the price that Yorick pays for the bond. How these items will impact Yoricks gross income $($if at all$).$ The adjustment amounts need not be calculated. 

 

Complete the paragraph below.

will pay

the amount of $

for interest accrued at the time of sale. This will adjust the price of the bond purchased to $

$.$ The resulting discount of $

can be either included in gross income ratably each year or included when sold or matured.

Answer rating: 100% (QA)

The two items affecting the price Yorick pays for the bond are Prevailing interest rates Since preva... View the full answer