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Market price of a bond

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
ISBN: 978-0-470-31754-9
1288 pages

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The market price of the bond is the present value of interest and principal discounted at the required return
The semiannual interest ...

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The solution explains how to calculate the market price of a bond