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

Exercise 81

Bonds payable—calculate market value On March 1, 2005, Matt purchased $63,000 of Lawson Co.’s 8%, 20-year bonds at face value. Lawson Co. has paid the annual interest due on the bonds regularly. On March 1, 2010, market interest rates had risen to 12%, and Matt is considering selling the bonds.

Required:

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

Step 1 of 7

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.