Selling at a Discount - Acct 2001, LSU

in Chapter 11 (Video 6 of 11)

7 minutes

When a bond's coupon rate is less than the market rate, that bond will sell at a discount. We'll figure out how to price a bond in that situation.

This Video Mentioned Some Formulas

Bond Face Value

+ Unamortized Premium

– Unamortized Discount

Bond Carrying Value

Bond Face Value * PV$1(i,n)

+ Payment Amount * PVOA(i,n)

Bond Selling Price

When calculating the selling price, be sure to use the Market Rate for i.

1	Interest Bearing Notes	8:26
2	Non-interest Bearing Notes	6:16
3	Contingencies	5:58
4	Intro to Bonds	10:04
5	Discounts and Premiums	7:34
6	Selling at a Discount You are here.	7:15
7	Selling for a Premium	8:11
8	Amortization	21:42
9	Borrowing Cost	6:33
10	Interacting with Market Rates	5:30
11	Retiring Bonds	9:54

	Click Here to View All Chapter 11 Problems at Once	View
1	Bond Theory Multiple Choice	Easy
2	Liability Classification	Easy
3	Bond Issue Prices	Moderate
4	Contingent Liabilities	Moderate
5	Contingent Liabilities - Warranties	Moderate
6	Coupon and Market Rates Multiple Choice	Moderate
7	Bond Amortization	Hard
8	Bond Retirement	Hard