Barnes Company issued $500,000 of bonds for $498,351. Interest is paid semiannually. The bond markets and the financial press are likely to report the bond issue price as:

Question

Quizplus · Accepted Answer

The bond issue price is reported as a percentage of the face value of the bonds. The face value of the bonds is $500,000, and the amount paid for the bonds is $498,351. Therefore, the bond issue price is calculated as ($498,351/$500,000) x 100 = 99.67%.

Barnes Company Issued $500,000 of Bonds for $498,351