A $1000 Bond with a Redemption Date of February 1,2024

question 51

Multiple Choice

A $1000 bond with a redemption date of February 1,2024 is purchased on October 7,2010.The quoted price,q,is 104.25.The bond is redeemable at par and pays interest at j₂ = 11%.What is the purchase price (full or dirty price) of the bond?

• A)$1022.47
• B)$1042.50
• C)$1060.83
• D)$1062.53

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Definitions:

Job Order Cost System

An accounting system that tracks costs individually for each job, rather than using a standard method for all jobs, suitable for companies producing unique or custom products.

Equivalent Units

a concept used in cost accounting to indicate a standard amount of work done on incomplete or partially manufactured units.

Conversion Costs

Costs incurred to convert raw materials into finished products, typically including direct labor and manufacturing overhead.

Equivalent Units

A measure used in process costing that converts partially completed units into a number of fully completed units.