A corporation sold an issue of 20-year bonds, having a total face value of P10,000,000 for P9,500,000. The bondsbear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond1.issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annualcost for interest and redemption of these bonds.2. A company has issued 10-year bonds, with a face value of P1,000,000 in P1,000 units. Interest at 16% is paidquarterly. If an investor desires to earn 20% nominal interest on P100,0000 worth of these bonds, what wouldthe selling price have to be?3. A P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at

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1. A corporation sold an issue of 20-year bonds, having a total face value of P10,000,000 for P9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.

1. A corporation sold an issue of 20-year bonds, having a total face value of P10,000,000 for P9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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