Compute the price of the bonds on their issue date, Accounting Basics

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Compute the price of the bonds on their issue date

On January 1, a company issues bonds with a par value of $300,000. The bonds mature in 5 years and pay 8% annual interest each June 30 and December 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables:

Present value of an annuity for 10 periods at 3%..8.5302

Present value of an annuity for 10 periods at 4%..8.1109

Present value of 1 due in 10 periods at 3%..0.7441

Present value of 1 due in 10 periods at 4%...0.6756

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Accounting Basics: Compute the price of the bonds on their issue date

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Accounting Basics: Compute the price of the bonds on their issue date

Reference No:- TGS096883

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Recent Questions Asked Accounting Basics

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: Compute the price of the bonds on their issue date

Reference No:- TGS096883

Recent Questions Asked Accounting Basics

Q : Fundamentals of capitalized lease

Q : Best estimate of the company total operating income

Q : Amount of cash for the payment of dividends

Q : What is dog huts break-even point

Q : Compute the price of the bonds on their issue date

Q : How would total costs of personnel be classified

Q : How would net costs of personnel be classified

Q : Determining the cost of direct materials

Q : Total assets and total liabilities of a business

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