Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 79

Bonds payable—calculate market value On August 1, 2002, Bonnie purchased $15,000 of Huber Co.’s 10%, 20-year bonds at face value. Huber Co. has paid the semiannual interest due on the bonds regularly. On August 1, 2010, market rates of interest had fallen to 8%, and Bonnie is considering selling the bonds.

Required:

Using the present value tables in Chapter 6, calculate the market value of Bonnie’s bonds on August 1, 2010.

Step 1 of 8

Calculate market value of Bonds payable:

Bonds Payable:

Bonds payable is a type of long-term liability or debt that has a fixed interest rate and a specified maturity.