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Question
When a bond is issued, what is its present value?
Step-by-Step Solution
Verified Answer
The long term-debt is a debt that is not due in one year.
1Step 1: Definition of payable
The bonds payable is a type of long-term debt in which the company raises money to fulfill its large amount of money needs.
2Step 2: Present value of bonds
The market value of the bonds is knowns as the present value of the bonds.
The present value is the sum of two items:
The present value of the principal and the present value of the stated interest.