Southwest Corporation issued bonds with the following details:
Face value: $600,000
Interest: 9 percent per year payable each December 31
Terms: Bonds dated January 1, 2009, due five years from that date
The annual accounting period ends December 31. The bonds were issued at 104 on January 1, 2009, when the market interest rate was 8 percent. Assuming Southwest Corporation uses effective-interest amortization.
Requirement:
Compute the issue price of the bonds in dollars (show computations).