Asked by Tehilla Peyamipour on Apr 24, 2024
If $500000 par value bonds with a carrying value of $476000 are redeemed at 97 a loss on redemption will be recorded.
Par Value
The face value of a bond or the stock value stated in the corporate charter, which may differ from its market value.
Carrying Value
The book value of an asset on a company's balance sheet, calculated as the original cost minus accumulated depreciation.
Loss On Redemption
The financial loss incurred when a debt instrument, such as a bond, is repaid before its maturity date.
- Understand the fundamentals of bond issuance, redemption, and their impact on the financial health and creditworthiness of a company.
Learning Objectives
- Understand the fundamentals of bond issuance, redemption, and their impact on the financial health and creditworthiness of a company.