Case-A
par value of bonds 500000
The stated rate of interest 7%
The market rate of interest 7%
As stated and the market rate of interest is equal, the bonds are issued at par value.
Therefore,
Cash received from issuance of bonds 500000
Interest expense (500000*7%) 35000
Cash paid for interest in Year-1 35000
Cash paid fat Maturity 500000
A market economic system is a monetary gadget where forces, called supply and demand, direct the production of goods and services. marketplace economies aren't managed through a government (like a central authority) and are instead based on voluntary exchange.
A market economic system is a financial machine in which the choices concerning investment, production, and distribution to the clients are guided with the aid of the fee indicators created with the aid of the forces of delivering and call for, wherein all suppliers and purchasers are unimpeded by way of charge controls or restrictions on contract freedom.
A marketplace is defined because of the sum general of all the buyers and dealers inside the region or area below consideration. The vicinity may be the earth, or international locations, regions, states, or cities. The cost, value, and charge of gadgets traded are as consistent with forces of delivery and demand in a marketplace.
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