Louisiana State University, Shreveport ACCOUNTING ACCOUNTING 701 I don’t quite understand the answer to this question. It is a a fill in the blank statement Please explain. Question: Ordinarily, the proceeds from

Louisiana State University, Shreveport ACCOUNTING ACCOUNTING 701 I don’t quite understand the answer to this question. It is a a fill in the blank statement Please explain. Question: Ordinarily, the proceeds from

I don’t quite understand the answer to this question. It is a a fill in the blank statement Please explain.

Question:

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Louisiana State University, Shreveport ACCOUNTING ACCOUNTING 701 I don’t quite understand the answer to this question. It is a a fill in the blank statement Please explain. Question: Ordinarily, the proceeds from
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Ordinarily, the proceeds from the sales of bond issue will be equal to :

Answer:

The present value of the face amount plus the present value of the stream of interest payments.

The issuing price of bond = Present value of the interest + Present value of the Face Value .

What is “present value of the stream of interest payments” ? Why is it called present value of the stream of interest payments?

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