A Bond Has a Maturity Value of $300,000 Payable in 4

question 43

Multiple Choice

A bond has a maturity value of $300,000 payable in 4 years. These bonds have a 7% coupon rate payable semi-annually, and the market yield was 4% when the bonds were purchased. How much premium or discount will be recorded upon purchase (rounded) ?

• A)$32,668 premium.
• B)$32,668 discount.
• C)$32,965 discount.
• D)$32,965 premium.

---

Definitions:

Van

A type of vehicle designed for transporting goods or people, characterized by its large cargo or passenger area and commonly used for commercial, logistical, or personal use.

Loss

The negative financial result from a business's operations where expenses exceed revenues.

Fully Depreciated

An asset has reached the end of its useful accounting life, and its book value is reduced to salvage or residual value.

Plant Asset

Long-term tangible assets that are used in the operation of a business and not expected to be converted to cash in the short term.