Answer:
$14,887.5
Explanation:
Carrying Value of the bond is the net of Face value and any amortised discount on the bond.
Face Value of the bond = $19,000
Issuance Value = $14,300
Discount Value = $19,000 - $14,300 = $4,700
This Discount will be amortized over the bond's life until the maturity on straight line basis.
Amortization in each period = $4,700 / (8x2) = $293.75 semiannually
Until December 31, 2017 two payment have been made and $587.5 is amortized in the two semiannual periods.
Un-amortized Discount = $4,700 - $587.5 = $4,112.5
Carrying value of the bond = Face value - Un-amortized Discount = $19,000 - $4,112.5 = $14,887.5
Answer:
For centuries the guideline for business transactions was the Latin term “caveat emptor” (let the buyer beware). This principle suggests that the seller is not responsible for the buyer’s welfare. In other words such principle gives the buyer the sole responsibility for checking the quality and suitability of the goods that he is buying from the seller before making a final purchase.
