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The book value of the bonds as of December 31,2019 is closest to:
A) $8,968.
B) $9,945.
C) $9,641.
D) $9,741.
Effective-interest Amortization
A method of amortizing the premium or discount on bonds payable that reflects interest expense on the outstanding balance of the bond over its life.
Issue Price
The price at which a company's shares or bonds are made available for sale when they are first issued to the public.
Book Value
The net value of a company's assets minus its liabilities, indicating the total value of the company’s equity as recorded in the financial statements.
- Acquire knowledge on the utilization of the effective-interest amortization technique for amortizing bond premium and discounts.
- Evaluate the interest charges and assess the book value of bonds given varying scenarios of interest rates.
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Learning Objectives
- Acquire knowledge on the utilization of the effective-interest amortization technique for amortizing bond premium and discounts.
- Evaluate the interest charges and assess the book value of bonds given varying scenarios of interest rates.
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