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Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 5.  Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount   Present value of the semiannual interest payments   Price received for the bonds

Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 5.  Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences. Present value of the face amount   Present value of the semiannual interest payments   Price received for the bonds

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Bond Discount, Entries for Bonds Payable Transactions

On July 1, Year 1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,100,000 of 9-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $7,644,536. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required:

5.  Compute the price of $7,644,536 received for the bonds by using Table 1, Table 2, Table 3 and Table 4. (Round to the nearest dollar.) Your total may vary slightly from the price given due to rounding differences.

Present value of the face amount  
Present value of the semiannual interest payments  
Price received for the bonds

 

Present Value of $1 at Compound Interest Duein n Periods Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 0.85734 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 3 0.79383 0.772 18 0.75131 0.73119 0.71178 0.69305 0.67497 4 0.73503 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.68058 0.64993 0.62092 0.59345 0.56743 054276 0.51937 0.63017 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 7 0.58349 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 8 054027 0.50187 0.46651 043393 0.40388 037616 0.35056 9. 0.50025 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 10 0.46319 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 11 042888 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 12 0.39711 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 13 036770 0.32618 0.28966 025751 022917 0.20416 0.18207 14 0.34046 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 15 031524 0.27454 0.23939 020900 0.18270 0.15989 0.14010 16 0.29189 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 17 027027 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 18 0.25025 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 19 0.23171 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 20 021455 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 21 0.19866 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 22 0.18394 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 23 0.17032 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 24 0.15770 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 25 0.14602 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 26 0.13520 0.10639 0.08391 0.06631 0.05252 0.04168 0.03315 27 0.12519 0.09761 0.07628 0.05974 0.04689 0.03689 0.02908 28 0.11591 0.08955 0.06934 0.05382 0.04187 0.03264 0.02551 29 0.10733 0.082 15 0.06304 0,04849 0.03738 0.02889 0.02237 30 0.09938 0.07537 0.05731 0.04368 0.03338 0.02557 0.01963 31 0.09202 0.06915 0.05210 0.03935 0.02980 0.02262 0.01722 32 0.08520 0.06344 0.04736 0.03545 0.02661 0.02002 0.01510 33 0.07889 0.05820 0.04306 0.03194 0.02376 0.01772 0.01325 34 0.07305 0.05339 0.03914 0.02878 0.02121 0.01568 0.01162 35 0.06763 0.04899 0.03558 0.02592 0.01894 0.01388 0.01019 40 0.04603 0.03184 0.02209 0.01538 0.01075 0.00753 0.00529 45 0.03133 0.02069 0.01372 0.00913 0.00610 0.00409 0.00275 50 0.02132 0.01345 0.00852 0.00542 0.00346 0.00222 0.00143
Transcribed Image Text:Present Value of $1 at Compound Interest Duein n Periods Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 2 0.85734 0.84168 0.82645 0.81162 0.79719 0.78315 0.76947 3 0.79383 0.772 18 0.75131 0.73119 0.71178 0.69305 0.67497 4 0.73503 0.70843 0.68301 0.65873 0.63552 0.61332 0.59208 0.68058 0.64993 0.62092 0.59345 0.56743 054276 0.51937 0.63017 0.59627 0.56447 0.53464 0.50663 0.48032 0.45559 7 0.58349 0.54703 0.51316 0.48166 0.45235 0.42506 0.39964 8 054027 0.50187 0.46651 043393 0.40388 037616 0.35056 9. 0.50025 0.46043 0.42410 0.39092 0.36061 0.33288 0.30751 10 0.46319 0.42241 0.38554 0.35218 0.32197 0.29459 0.26974 11 042888 0.38753 0.35049 0.31728 0.28748 0.26070 0.23662 12 0.39711 0.35553 0.31863 0.28584 0.25668 0.23071 0.20756 13 036770 0.32618 0.28966 025751 022917 0.20416 0.18207 14 0.34046 0.29925 0.26333 0.23199 0.20462 0.18068 0.15971 15 031524 0.27454 0.23939 020900 0.18270 0.15989 0.14010 16 0.29189 0.25187 0.21763 0.18829 0.16312 0.14150 0.12289 17 027027 0.23107 0.19784 0.16963 0.14564 0.12522 0.10780 18 0.25025 0.21199 0.17986 0.15282 0.13004 0.11081 0.09456 19 0.23171 0.19449 0.16351 0.13768 0.11611 0.09806 0.08295 20 021455 0.17843 0.14864 0.12403 0.10367 0.08678 0.07276 21 0.19866 0.16370 0.13513 0.11174 0.09256 0.07680 0.06383 22 0.18394 0.15018 0.12285 0.10067 0.08264 0.06796 0.05599 23 0.17032 0.13778 0.11168 0.09069 0.07379 0.06014 0.04911 24 0.15770 0.12640 0.10153 0.08170 0.06588 0.05323 0.04308 25 0.14602 0.11597 0.09230 0.07361 0.05882 0.04710 0.03779 26 0.13520 0.10639 0.08391 0.06631 0.05252 0.04168 0.03315 27 0.12519 0.09761 0.07628 0.05974 0.04689 0.03689 0.02908 28 0.11591 0.08955 0.06934 0.05382 0.04187 0.03264 0.02551 29 0.10733 0.082 15 0.06304 0,04849 0.03738 0.02889 0.02237 30 0.09938 0.07537 0.05731 0.04368 0.03338 0.02557 0.01963 31 0.09202 0.06915 0.05210 0.03935 0.02980 0.02262 0.01722 32 0.08520 0.06344 0.04736 0.03545 0.02661 0.02002 0.01510 33 0.07889 0.05820 0.04306 0.03194 0.02376 0.01772 0.01325 34 0.07305 0.05339 0.03914 0.02878 0.02121 0.01568 0.01162 35 0.06763 0.04899 0.03558 0.02592 0.01894 0.01388 0.01019 40 0.04603 0.03184 0.02209 0.01538 0.01075 0.00753 0.00529 45 0.03133 0.02069 0.01372 0.00913 0.00610 0.00409 0.00275 50 0.02132 0.01345 0.00852 0.00542 0.00346 0.00222 0.00143
Present Value of Ordinary Annuity of $1 per Period Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 1.78326 1.75911 1.73554 1.71252 1.69005 1.66810 1.64666 3 2.57710 2.53129 248685 2.44371 240183 2.36115 232163 4 3.31213 3.23972 3.16987 3.10245 3.03735 2.97447 2.91371 3.99271 3.88965 3.79079 3.69590 3.60478 3.51723 3.43308 4.62288 4.48592 4.35526 4.23054 4.11141 3.99755 3.88867 520637 5.03295 4.86842 4.71220 4.56376 4.42261 4.28830 5.74664 5.53482 5.33493 5.14612 4.96764 4.79677 4.63886 6.24689 5.99525 5.75902 553705 5.32825 5.13166 4.94637 10 6.71008 6.41766 6.14457 588923 5.65022 5.42624 5.21612 11 7.13896 6.80519 6.49506 620652 5.93770 5.68694 5.45273 12 7.53608 7.16073 6.81369 6.49236 6.19437 5.91765 5.66029 13 7.90378 7.48690 7.10336 6.74987 6.42355 6.12181 5.84236 14 822424 7.78615 7.36669 6.96187 6.62817 630249 6.00207 15 8.55948 8.06069 7.60608 7.19087 6.81086 6.46238 6.14217 16 885137 8.31256 7.82371 737916 6.97399 6.60388 6.26506 17 9.12164 8.54363 8.02155 7.54879 7.11963 6.72909 6.37286 18 937189 8.75563 8.20141 7.70162 7.24967 6.83991 6.46742 19 9.60360 8.95011 8.36492 783929 7.36578 693797 6.55037 20 9.81815 9.12855 8.51356 7.96333 7.46944 7.02475 6.62313 21 10.01680 9.29224 8.64869 8.07507 7.56200 7.10155 6.68696 22 10.20074 9.44243 8.77154 8.17574 7.64465 7.16951 6.74294 23 10.37106 9.58021 8.88322 8.26643 7.71843 7.22966 6.79206 24 1052876 9.70661 8.98474 834814 7.78432 728288 6.835 14 25 10.67478 9.82258 9.07704 8.42174 7.84314 7.32998 6.87293 26 10.80998 9.92897 9.16095 8.48806 7.89566 7.37167 6.90608 27 10.93516 10.02658 9.23722 8.54780 7.94255 7.40856 6.93515 28 11.05108 10.11613 9.30657 8.60162 7.98442 7.44120 6.96066 29 11.15841 10.19828 9.36961 8.65011 8.02181 7.47009 6.98304 30 11.25778 10.27365 9.42691 8.69379 8.05518 7.49565 7.00266 31 11.34980 10.34280 9.47901 8.73315 8.08499 7.51828 7.01988 32 11.43500 10.40624 9.52638 8.76860 8.11159 753830 7.03498 33 11.51389 10.46444 9.56943 8.80054 8.13535 755602 7.04823 34 11.58693 10.51784 9.60857 8.82932 8.15656 7.57170 7.05985 35 11.65457 10.56682 9.64416 8.85524 8.17550 7.58557 7.07005 40 11.92461 10.75736 9.77905 8.951 05 8.24378 7.63438 7.10504 45 1210840 10.88120 9.86 281 9.00791 8.28252 7.66086 7.12322 50 12.23348 10.96168 9.91481 9.04165 830450 7.67524 7.13266
Transcribed Image Text:Present Value of Ordinary Annuity of $1 per Period Periods 8% 9% 10% 11% 12% 13% 14% 1 0.92593 0.91743 0.90909 0.90090 0.89286 0.88496 0.87719 1.78326 1.75911 1.73554 1.71252 1.69005 1.66810 1.64666 3 2.57710 2.53129 248685 2.44371 240183 2.36115 232163 4 3.31213 3.23972 3.16987 3.10245 3.03735 2.97447 2.91371 3.99271 3.88965 3.79079 3.69590 3.60478 3.51723 3.43308 4.62288 4.48592 4.35526 4.23054 4.11141 3.99755 3.88867 520637 5.03295 4.86842 4.71220 4.56376 4.42261 4.28830 5.74664 5.53482 5.33493 5.14612 4.96764 4.79677 4.63886 6.24689 5.99525 5.75902 553705 5.32825 5.13166 4.94637 10 6.71008 6.41766 6.14457 588923 5.65022 5.42624 5.21612 11 7.13896 6.80519 6.49506 620652 5.93770 5.68694 5.45273 12 7.53608 7.16073 6.81369 6.49236 6.19437 5.91765 5.66029 13 7.90378 7.48690 7.10336 6.74987 6.42355 6.12181 5.84236 14 822424 7.78615 7.36669 6.96187 6.62817 630249 6.00207 15 8.55948 8.06069 7.60608 7.19087 6.81086 6.46238 6.14217 16 885137 8.31256 7.82371 737916 6.97399 6.60388 6.26506 17 9.12164 8.54363 8.02155 7.54879 7.11963 6.72909 6.37286 18 937189 8.75563 8.20141 7.70162 7.24967 6.83991 6.46742 19 9.60360 8.95011 8.36492 783929 7.36578 693797 6.55037 20 9.81815 9.12855 8.51356 7.96333 7.46944 7.02475 6.62313 21 10.01680 9.29224 8.64869 8.07507 7.56200 7.10155 6.68696 22 10.20074 9.44243 8.77154 8.17574 7.64465 7.16951 6.74294 23 10.37106 9.58021 8.88322 8.26643 7.71843 7.22966 6.79206 24 1052876 9.70661 8.98474 834814 7.78432 728288 6.835 14 25 10.67478 9.82258 9.07704 8.42174 7.84314 7.32998 6.87293 26 10.80998 9.92897 9.16095 8.48806 7.89566 7.37167 6.90608 27 10.93516 10.02658 9.23722 8.54780 7.94255 7.40856 6.93515 28 11.05108 10.11613 9.30657 8.60162 7.98442 7.44120 6.96066 29 11.15841 10.19828 9.36961 8.65011 8.02181 7.47009 6.98304 30 11.25778 10.27365 9.42691 8.69379 8.05518 7.49565 7.00266 31 11.34980 10.34280 9.47901 8.73315 8.08499 7.51828 7.01988 32 11.43500 10.40624 9.52638 8.76860 8.11159 753830 7.03498 33 11.51389 10.46444 9.56943 8.80054 8.13535 755602 7.04823 34 11.58693 10.51784 9.60857 8.82932 8.15656 7.57170 7.05985 35 11.65457 10.56682 9.64416 8.85524 8.17550 7.58557 7.07005 40 11.92461 10.75736 9.77905 8.951 05 8.24378 7.63438 7.10504 45 1210840 10.88120 9.86 281 9.00791 8.28252 7.66086 7.12322 50 12.23348 10.96168 9.91481 9.04165 830450 7.67524 7.13266
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