Firm ZYX paid $94,111 on 1/1/y1 to purchase a bond with the following terms: • Par value - $100,000 ⚫ Stated Interest -10% • Market Interest - 11% • • Payments - Annually Maturity 1/1/y11 Required: What will be the reported value of the bond on 12/31/y1, when the market value was $92,256, if the bond is classified as an Available for Sale investment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 5P
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Firm ZYX paid $94,111 on 1/1/y1 to purchase a bond with the following terms:
• Par value - $100,000
⚫ Stated Interest -10%
• Market Interest - 11%
•
•
Payments - Annually
Maturity 1/1/y11
Required: What will be the reported value of the bond on 12/31/y1, when the market value
was $92,256, if the bond is classified as an Available for Sale investment?
Transcribed Image Text:Firm ZYX paid $94,111 on 1/1/y1 to purchase a bond with the following terms: • Par value - $100,000 ⚫ Stated Interest -10% • Market Interest - 11% • • Payments - Annually Maturity 1/1/y11 Required: What will be the reported value of the bond on 12/31/y1, when the market value was $92,256, if the bond is classified as an Available for Sale investment?
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