Solved: How to compute the present value of a bond, Accounting Basics

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How to compute the present value of a bond

Problem: Please explain how to compute the present value of a bond?

Galway Bay Enterprises issued 10%, 8-year, $2,000,000 par value bonds that pay intrest semiannually on October 1 and April 1. The bonds are dated April 1, 2002, and are issued on that date. The discount rate of interest for such bonds on April 1, 2002, is 12%. What cash proceeds did Galway Bay receive from issuance of the bond?

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Accounting Basics: How to compute the present value of a bond

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: How to compute the present value of a bond

Reference No:- TGS01739612

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Description of activity costs

Q : Short-term performance at the expense of long-term results

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Q : How to compute the present value of a bond

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: How to compute the present value of a bond

Reference No:- TGS01739612

Recent Questions Asked Accounting Basics

Q : Description of activity costs

Q : Short-term performance at the expense of long-term results

Q : Distinction between financial accounting-other accounting

Q : What is the dividend yield

Q : How to compute the present value of a bond

Q : Contributing money to an investment account

Q : Adjust expenses paid in the current year

Q : Types of products make ideal web products

Q : Basic accounting equation

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