### Computing bond-s value

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##### Reference no: EM1310363

1) Sasha company has level -coupon bond with 9% coupon rate; interest is paid annually. The bond has twenty years to maturity and the face value of= \$1000; similar bonds presently yield 7%. By previous agreement company will omit the coupon interest payments in years 8, 9, and 10. These payments will be repaid, without interest, at maturity. Compute the bond's value?

2) A bond with \$750,000 maturity value is immediately retired for= \$745,000 plus accrued interest. Discount on bonds payable (bond discount) at retirement date is= \$25,500. Which of the give statements is right?

i) Gain on the debt extinguishment is \$5,000
ii) Loss on the debt extinguishment is \$20,500
iii) Gain on the debt extinguishment is \$30,500
iv) Gain or loss on debt extinguishment cannot be found out without knowing dollar amount of accrued interest.

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