Accounting for debt by the issuer: example
{"Image DocumentName": "Accounting for debt by the issuer: example", "Image ImageDescription": "Assumptions about the bond: Principal =  1,000. Coupon interest rate: Stated or contractual rate of interest to be paid to the bondholders = 10%, annual. Maturity = 5 years. Assumption about the debt market on the day of valuing: Market rate (yield or effective rate): Return the market demands on that bond on day we are valuing it = 10%. For simplicity, assume a flat interest rate yield curve. LOS. Determine the initial recognition and measurement and subsequent measurement of bonds. Pages 606\u2013618. The market rate is the rate at which the future cash flows are discounted. For simplicity, these examples assume a flat interest rate yield curve (i.e., that the market rate of interest is the same for each period). More-precise bond valuations use the interest rate applicable to each time period in which a payment of interest or principal occurs. Copyright \u00a9 2013 CFA Institute.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}