When the YTM is lower than the bond's coupon rate, the bond's market value exceeds its par value (premium bond). Bonds are selling at a discount if their coupon rate is smaller than their YTM. A bond is trading at par if its coupon rate is equal to its yield to maturity (YTM).
<h3>What is the cost of a $1,000 par value, three year, zero-coupon bond?</h3>
(a) A three-year zero-coupon bond with a face value of $1,000 would have a present value (or price) of 874.69 with a yield of 4.564 percent.
<h3>What is the yield to maturity on a discount bond with a $1000 face value that will mature in a year and sell for $800?</h3>
The yield to maturity is determined using the following formula with the current price of $800: 800 = 1000 / (yield to maturity plus one) Yield to maturity Equals 1 plus yield. Yield until maturity equals 25%
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Answer:
Balance = $1,650
Explanation:
As Norma company has paid 4 months rent in advance, therefore at the end of June, norma company will record its 1-month expense as follows
Adjusting entry at the end of June would be
DEBIT CREDIT
Entry
Rent Expense $550
Prepaid Rent $550
The balance on Norma's prepaid expense would be
Prepaid Rent = $2200
Rent Expense = ($550)
Balance = $1,650
Confirm accounts receivable ending balances and sales terms, such as right of return and consignment arrangements.-- Existence and accuracy
What is an Accounts Receivable Confirmation?
When an auditor is examining the accounting records of a client company, a primary technique for verifying the existence of accounts receivable is to confirm them with the company's customers. The auditor does so with an accounts receivable confirmation
What does it mean to confirm account?
Account verification is the process of verifying that a new or existing account is owned and operated by a specified real individual or organization. A number of websites, for example social media websites, offer account verification services.
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Answer:
$75,000
Explanation:
Calculation for the annual dividend on the preferred stock
Using this formula
Annual Dividend= Number of shares × Par value × Dividend %
Let plug in the formula
Annual Dividend= 10,000 shares × $125 × 6%
Annual Dividend= $75,000
Therefore the annual dividend on the preferred stock will be $75,000
