Exhibit 14-3
A $700,000, ten-year, 9% bond issue was sold to yield 10% interest payable annually. Actuarial information for 10 periods is as follows:
-Refer to Exhibit 14-3. The discount or premium at the date of bond issuance would be

Question

Exhibit 14-3
A $700,000, ten-year, 9% bond issue was sold to yield 10% interest payable annually. Actuarial information for 10 periods is as follows: 
-Refer to Exhibit 14-3. The discount or premium at the date of bond issuance would be

Quizplus · Accepted Answer

The discount or premium on a bond at issuance is determined by comparing the bond's face value to its present value. A discount occurs when the present value of the bond's cash flows (interest and principal) is less than its face value. Without the specific details from Exhibit 14-3, such as interest rates, cash flows, and face value, we can't calculate the exact figures. However, the correct answer is identified as a discount, not a premium, indicating that the bond was sold for less than its face value.

Exhibit 14-3 A $700,000, Ten-Year, 9% Bond Issue Was Sold to Yield