If a $10,000 Face Value Discount Bond Maturing in One

question 90

Multiple Choice

If a $10,000 face value discount bond maturing in one year is selling for $8,000,then its yield to maturity is

• A) 10 percent.
• B) 20 percent.
• C) 25 percent.
• D) 40 percent.

---

Definitions:

Depreciated

A measure of the reduction in the value of an asset over time, often used for accounting and tax purposes.

Unearned Revenue

Money received by a company for a service or product that has yet to be provided or delivered.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the correct period.

Total Contract

Refers to the complete agreement and its associated financial value in a contractual arrangement between parties.