Examlex
Which of the two bonds in each example would you expect to pay the higher interest rate? Explain why.
a. a Canadian government bond or a bond issued by the government of Guatemala
b. a government of Canada bond or a municipal bond of the same face value and term
c. a 6-month Treasury bill or a 20-year bond
d. an Air Canada company bond or a bond issued by a new high tech start-up
Journal Entries
The basic means of recording financial transactions in the accounting system, consisting of debits and credits to various accounts.
Market Rate
The prevailing interest rate available in the marketplace for investments or loans of similar risk and maturity.
Contract Rate
The agreed upon rate in a financial contract, such as the interest rate on a loan or bond.
Sold at Discount
Refers to items sold below their usual selling price, often to clear inventory or promote sales.
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