9. Joba Corporation issued $1,000,000 of13% (stated rate) bonds payable on January1, 2020, due on January 1, 2028, withinterest payable each January 1. Investorsrequire an effective-interest rate (marketrate) of 10%. Calculate the amount ofdiscount or premium that will be recognizedwhen the company issues the bonds(indicate the amount and wither its discountor premium). P.V. of 1 (single sum)(n)Periods8%9%10%11%12%15%.92593.91743.90909.90090.89286.869571.85734.84168.82645.81162.79719.75614.77218.70843.73119.65873.59345.79383.75132.71178.657523.73503.68301.63552.571754.68058.64993.62092.56743.49718.63017.58349.59627.56447.53464.50663.432336..54703.51316.48166.45235375947.50187.46043.54027.46651.43393.40388.32690.50025.42410.39092.36061.28426.46319.42241.38554.35218.32197.2471910P.V. of annuity(n)Periods8%9%10%11%12%15%.92593.91743.90909.90090.89286.8695711.783261.759111.735541.712521.690051.625712.577103.312132.531302.486852.443712.401832.2832333.239723.169863.102453.037352.8549843.992713.889653.790793.695903.604783.352164.622884.485924.355264.230544.111413.784484.712205.146125.206375.032954.868425.334934.563764.967644.160425.746645.534824.4873285.995256.417665.537055.889235.328255.650226.246895.759024.771589.6.710086.144575.0187710

Issue price of the bonds = Present value of principal + Present value of interest payments = face…

9. Joba Corporation issued $1,000,000 of 13% (stated rate) bonds payable on January 1, 2020, due on January 1, 2028, with interest payable each January 1. Investors require an effective-interest rate (market rate) of 10%. Calculate the amount of discount or premium that will be recognized when the company issues the bonds (indicate the amount and wither its discount or premium).

9. Joba Corporation issued $1,000,000 of 13% (stated rate) bonds payable on January 1, 2020, due on January 1, 2028, with interest payable each January 1. Investors require an effective-interest rate (market rate) of 10%. Calculate the amount of discount or premium that will be recognized when the company issues the bonds (indicate the amount and wither its discount or premium).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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