A $60,000 Face Value STRIPS Is Quoted at 96

question 39

Multiple Choice

A $60,000 face value STRIPS is quoted at 96.100. What is the dollar price?

• A)$57,267.50
• B)$57,350.00
• C)$57,415.00
• D)$57,577.78
• E)$57,660.00

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Definitions:

Bond Payable

A financial instrument representing a loan made by an investor to a borrower, typically corporate or governmental, with a promise to pay back the principal along with interest on specified dates.

Operating Activities

Activities that constitute the primary or main activities of a company, such as selling goods and services, which are reflected in the income statement.

Statement Of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives.

Direct Method

In cash flow accounting, this method itemizes major classes of gross cash receipts and payments, providing a more detailed view of a company's cash flows from operating activities.