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jlil
May 22, 2008, 10:05 PM
I am having a problem figureing out how to find a bonds issue price here is one of the many account problems I need to solve. I figure if I can see how one is calculated I could figure out the rest. The interest is paid semiannually on June 30 and dec 31. The bonds have a $20,000 par value an annual contract rate of 10% and mature in 10 years. The market rate at the date of issuance is 8%
I need to determine the bonds issue price on the date of the sale of Jan 1, 05

morgaine300
May 23, 2008, 12:40 AM
Here is one of my past posts on the basic steps to finding the issue price of a bond:

https://www.askmehelpdesk.com/finance-accounting/issue-price-bond-181604.html

As stated in that response, there are four different methods by which you can actually do this (that I'm aware of), so it's a bit difficult to actually show how to do the present value steps without knowing what method you're using. Just in case you happen to want the equations, someone asked for these earlier today, which is at the end of this post:

https://www.askmehelpdesk.com/accounting/how-do-you-compute-current-price-bonds-193231.html