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Should bonds issued at a premium always have?
Bonds issued at a premium always have
Amortization schedule for bonds issued at a premium?
All of the above are correct
When effective interest method is used to amortize bond premium or discount the periodic amortization will be?
increasse if the bonds were issued at either a discount or premium.
What's the difference between normal bonds and premium bonds?
Normal bonds are issued at face value and pay regular interest payments. Premium bonds are issued at a higher price than face value and do not pay interest; instead, investors are entered into a lottery for the chance to win cash prizes.
What services do NSandI premium bonds provide?
The NS&I Premium Bonds is a lottery bond issued by the United Kingdom. Premium Bonds was introduced by Harold Macmillan in the year 1956 and provides instead of paying the interest to a bond, it pays with a prize fund from which a monthly lottery distributes tax-free prices.
When bonds are issued at a premium what is the affect on interest?
Bonds issued at a premium offer an interest rate that is above the market interest rate. Typically, a bond issuer offers a premium interest rate to offset higher risk associated with a bond offering that has a low credit rating. A purchaser of a bond offered at a premium will receive a higher interest rate but will incur a higher degree of credit risk.
XYZ Corp sells its bonds at a premium and applies the effective interest method in amortizing the premium.Do you think the annual interest expense will increase or decrease over the life of the bonds?
It really depends on how much is the premium paid. Effectively if the premium paid is higher than the par value of the bonds issued, the annual interest expense would be relatively lower. Another perspective is that since that both the bonds and its premium uses effective interest method, considering all factors remain the same, the annual interest expense will remain unchanged. Premium of the bond should be captialized within the holders of the bonds and amortized over the years in which the manner best represents. Issuer of the bonds generally do not captialize the premium of the bond separately. You should also note that the bonds issued are not compound financial instruments or contain any embedded derivates.
What separates premium bonds from other types of bonds?
There are many things that separate premium bonds from regular bonds. Premium bonds, unlike regular bonds, are any bonds that are already trading at a price above par.
Where can one check Premium Bonds online?
Premium Bonds are lottery bonds issued in the United Kingdom where the bondholders are paid dividends via a random, monthly drawing. Recent winners of the Premium Bond Lottery appear on the National Savings and Investment Agency's website and past winners can be found on The London Gazette's website by searching for the keyword "unclaimed prizes".
What is the biggest monthly prize that holders of premium bonds can win?
In recent history, the highest amount that someone has won from the National Premium Bonds is one million pounds. This amount has been won twice in the time period from 2005 to 2009.
Which of these are issued by corporations and the U.S. government?
Bonds are issued by both corporations and the U.S. government. Corporate bonds are issued by companies to raise funds, while U.S. government bonds, such as Treasury bonds, are issued by the government to finance its operations and projects.
What are some benefits of buying premium bonds?
Premium bonds offer higher interest rates than bonds sold at par. However, there is a premium cost that one must pay. Don't let that deter you, as the extra interest should more than pay the premium when the bond reaches maturity. The other benefit of Premium bonds is that they are less volatile than par bonds.
