Answered: nuary 1, Indigo Corporation issues…

nuary 1, Indigo Corporation issues $4350000, 5-year, 12% bonds at 96 with interest payable on January 1. What is the carrying value of the bonds at the end of the third interest period? $4280400

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 7MC: On January 1 a company issues a $75,000 bond that pays interest semi-annually. The first interest...

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Question

On January 1, Indigo Corporation issues $4350000, 5-year, 12% bonds at 96 with interest payable on January 1. What is the carrying value of the bonds at the end of the third interest period?

$4280400

$4106400

$4245600

$4036800

Definition Definition Calculates the present value of a bond's expected future periodic coupon payments. Bond valuation determines the theoretical fair value of a particular bond and helps investors estimate what rate of return they could expect. The bond's theoretical fair value is computed by discounting the future cash flows or coupon payments by an applicable discount rate.

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