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IV. Bonds and Debt Restructure (Bond Types (Sinking Fund Bonds (Cash held…

- - - - Also called the Market Value of Bond Proceeds
  - - - Face: 1000
      - Stated Interest Rate: 6%
      - Yield Interest Rate: 9%
      - Bond Term: 10 periods
      - PV of a Bond Calculations
        
        Step 1: PV$1 for 10 periods @ 9% = .422
        
        .422 * 1000
        
        $422
        
        Step 2: OA PV $1 at 10 periods @ 9% = 6.418
        
        6.418 x 6% x1000
        
        385
        
        Carry amount of bond = 422+385 =807
- - - - Common stock (Par) 50,000
        with APIC(plug) 1,250,000
- - - - Market rate 12% > Stated Rate 10%
      - Par Value: $100, Has to sell for $98
- - - - Unless the buyer has already paid
        for the accrued interest before hand
- - - - Yield Rate = market Rate
      - Carry Value = Bond amount +/- Pre/Dis - Amortization