Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life
1 answer:
You might be interested in
The security market is filled with many different types of marketable securities like shares debentures and bonds which can be traded via different trading platforms available in the securities market.
<h3>What are bonds ?</h3>- Bonds are the securities in the documented form which can be traded and exchanged containing a maturity date and the principle amount to be paid at maturity.
- These are instruments of fixed income because the bearer of bonds can be said as a creditor to the issuer and will be paid the fixed amount as per the face value of the bond.
- Bonds can be issued by government , municipality or a company.
The par value is a value which is equal to the face value of an instrument and which does not contain any element of premium or discount.
Therefore the bonds from U.S. Treasury, from Alachua County, and from the city of Northfield will be considered to be purchased on the par value of $1,000 from each of the following irrespective of the fact that what price they are being sold in the market.
<h3>Calculation</h3>Hence the total cost for Lana if she purchase 1 bond from each of the following at a par value of $1,000 will be $3,000 and OPTION A is correct as per the question.
Learn more about bonds here: