Bonds

Question 0

Weather the bond is issued at a premium or discount or at par, the interest payable (in cash) is calculated the same way:

Answer 0

Face value (principal) of the bonds times coupon (contractual interest rate).

Question 1

The market price of a bond issues at a premium is equal to the present value of its principal amount and-

Answer 1

The present value of all future interest payments, at the market(effective) interest rate.

Question 2

If electing fair value option for valuing bonds payable

Answer 2

The fair value of the bond and the principle obligation value must be disclosed