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-   -   How do you compute the bond price? (https://www.askmehelpdesk.com/showthread.php?t=406833)

  • Oct 16, 2009, 11:08 PM
    Tammy100
    How do you compute the bond price?
    Computing bond price
  • Oct 17, 2009, 12:03 AM
    morgaine300

    There's a couple of places I've answered this:

    https://www.askmehelpdesk.com/financ...ce-199941.html
    https://www.askmehelpdesk.com/financ...ds-200150.html
  • Oct 17, 2009, 12:48 AM
    Tammy100
    Walmart issues bonds dated January 1, 2000, that pay interest semiannually on June 30 and December 31. The bonds have a $20,000 par value, an annual contract rate of 10%, and mature in 10 years.

    For each of the following three separate situations, (a) determine the bonds’ issue price on January
    1, 2005, and (b) prepare the journal entry to record their issuance.
    1. Market rate at the date of issuance is 8%.
    2. Market rate at the date of issuance is 10%.
    3. Market rate at the date of issuance is 12%.

    Please show how to do this...
  • Oct 17, 2009, 01:59 PM
    morgaine300

    I've already given you two places showing the steps. I'm not going to just do your homework for you. See if you can follow the steps and at least make some attempt at it, and then post that. We can let you know how you're doing and guide from there.
  • Oct 26, 2009, 04:21 AM
    decisionsupport

    Tammy, see this article that has an example almost verbatim to your question. The numbers are slightly different but if you can follow these steps, you'll get your answer.

    Pricing Debt Securities
  • Jun 25, 2012, 02:43 PM
    decisionsupport
    I've moved my article on Pricing Debt Securities to the following address if anyone is interested... The Basics And Pricing Of Debt Securities (Bonds) | eFinancialAnalysis

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