On January 1, year 1, ABC. Corp. issued bonds as follows: USE THIS FORMULA PLEASE: bond price = PV Factor x Face Value + Face Value x Stated Interest rate x PV Annuity factor Face value $3000000 Stated (or coupon) annual rate of interest 6 % Coupon is paid twice annually. Market annual rate of interest 8 % Term in years 3 How much did the bond sell for? Round your answer to the nearest dollar.

On January 1, year 1, ABC. Corp. issued bonds as follows: USE THIS FORMULA PLEASE: bond price = PV Factor x Face Value + Face Value x Stated Interest rate x PV Annuity factor Face value $3000000 Stated (or coupon) annual rate of interest 6 % Coupon is paid twice annually. Market annual rate of interest 8 % Term in years 3 How much did the bond sell for? Round your answer to the nearest dollar.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?
Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
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