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Bond question?


Bonds with a face value of $100,000 were purchased through a broker at 97 plus accrued interest of $1,000 and brokerage commissions of $350. The amount to be debited to the investment account is?

Easy..$98,350.

97 is the price but means you pay 97 cents on the dollar so you pay 97000 for the 100,000 bond. The accrued interest and brokerage charges are extras you need to pay for so they just get added to the total price.

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