Exhibit 12-1 THE FOLLOWING INFORMATION IS FOR THE NEXT PROBLEM(S)

question 62

Multiple Choice

Exhibit 12-1
THE FOLLOWING INFORMATION IS FOR THE NEXT PROBLEM(S)
A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually.
-Refer to Exhibit 12-1. Calculate the current price of the bond.

• A) $1579.46
• B) $918.89
• C) $789.29
• D) $1000
• E) $743.29

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Definitions:

Checks Written

Financial documents that instruct a bank to pay the specified amount from the drawer's account to the person or entity named on the check.

Deposits In Transit

Funds that have been sent to a bank but not yet recorded by the bank in the company’s account balance.

Outstanding Checks

Checks that have been written and recorded in a company's accounting system but have not yet been cashed or cleared by the bank.

Credit Memo

A document issued by a seller to a buyer, reducing the amount that the buyer owes to the seller under previous invoices.