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Issue Price

Youngblood Inc. plans to issue $500,000 face value bonds with a stated interest rate of 8%. They will mature in ten years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 8%, (b) 6%, and (c) 10%.

Required

For each market interest rate, answer the following questions:

1. What is the amount due at maturity?

2. How much cash interest will be paid every six months?

3. At what price will the bond be issued?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91624309

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