CPA Questions and Answers

CPA Questions and Answers The market price of a bond issued at a discount is the present value of its principal amount at the market (effective) rate of interest a. Less the present value of all future interest payments at the rate of interest stated on the bond. b. Plus the present value of all future interest payments at the rate of interest stated on the bond. c. Plus the present value of all future interest payments at the market (effective) rate of interest. d. Less the present value of all future interest payments at the market (effective) rate of interest. - Correct Answer-c. @ issuance the bond is valued at the PV of the principal and interest payments , discounts at the prevailing market rate of interest at the date of issuance of the bond