Calculate the bond discount at issuance- Luba Corporation
Not what you're looking for?
On January 1, 2005, when the market interest rate was 14%, Luba Corporation issued bonds in the face amount of $500,000, with interest at 12% payable semiannually. The bonds mature on December 31, 2014.
Required
Calculate the bond discount at issuance. How much of the discount should be amortized by the effective interest method on July 1, 2005?
Purchase this Solution
Solution Summary
You will find the answer to this puzzling question inside, along with helpful details on how to solve it yourself.
Solution Preview
FV = 500,000
N = 10*2 = 20
payment each period = 500,000 * 12%/2 = 30,000
yield rate = 14%/2 = 7%
Then using a financial calculator, or EXCEL ...
Purchase this Solution
Free BrainMass Quizzes
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations