A company issues $100,000 of semiannual 10-year, 8% bonds sold to yield 10%
Present value of $1.00 at 5% for 20 periods 0.3769
Present value of $1.00 at 8% for 10 periods 0.4632
Present value of ordinary annuity of $1.00 @ 5% for 20 periods 12.462
Present value of ordinary annuity of $1.00 @ 8% for 10 periods 6.710
What is the carrying amount of the bonds?
C. $98, 452
The carrying amount at the date of issue is the price at which the bonds are sold. The price is the present value of interest and principal discounted at the yield.
The semi ...
The solution explains how to calculate the carrying amount of a bond