Compute the market price of a bond. Banzai Corporation is issuing $200,000 of 8%, 5 year bonds when potential bond investors want a return of 10%. Interest is payaing semiannually. (The bonds are selling at a discount). For an example, refer to Chapter 15, page 668. An example of the computations you need to make are shown in Illustration 15A-10. You will need to use Tables 15A-1 and 15A-2 located with the chapter.
Accounting Principles, 9th Edition
Jerry J. Weygandt, University of Wisconsin, Madison
Paul D. Kimmel, University of Wisconsin-Milwaukee
Donald E. Kieso, Northern Illinois University
The market price of the bond is the present value of interest and principal discounted at the required return
The semiannual interest ...
The solution explains how to calculate the market price of a bond