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

Question

Quizplus · Accepted Answer

The bond was issued for $498,351 which is less than the face value of $500,000. The market price is typically stated as a percentage of the face value. To calculate this percentage, we need to divide the issue price by the face value and multiply by 100.

Market price = issue price / face value * 100

Market price = $498,351 / $500,000 * 100

Market price = 99.67%

Therefore, the bond issue price is likely to be stated as 99.67 in financial press and markets.

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