See the previous W5 version guide.
PURPOSE
This document describes the procedure for the computation of bond premium/ discount.
WHY IS THIS IMPORTANT?
This allows users to verify the formula and methodology used by CS Lucas to compute bond premium/ discount.
FORMULA
The example below shows how the system compute the bond premium/ discount.
Month end journals at 30 Nov 2019.
Amortised Cost at 30-Nov-2019 = 103.436864764983 (refer “CLOSING” from amortised bond query)
Nominal Amount = 1,000,000.00
Carrying Cost = 1,000,000 * 103.436864764983%
= 1,034,368.65
Amount of premium = 1,034,368.65 – 1,000,000.00
= 34,368.65
FREQUENTLY ASKED QUESTIONS
RELATED INFORMATION
CHANGE HISTORY
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