At the beginning of the current year, QUATRO Company purchased 5-year bonds with a face amount of ₱ 2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72; present value of an annuity of 1 for 10 periods at 4% is 8.11; present value of 1 for 10 periods at 4% is .676; present value of 1 for 10 periods at 5% is .614; present value of 1 for 5 periods at 10% is .621; present value of 1 for 5 periods at 8% is .681. What is the market or purchase price of the bonds upon acquisition?
At the beginning of the current year, QUATRO Company purchased 5-year bonds with a face amount of ₱ 2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72; present value of an annuity of 1 for 10 periods at 4% is 8.11; present value of 1 for 10 periods at 4% is .676; present value of 1 for 10 periods at 5% is .614; present value of 1 for 5 periods at 10% is .621; present value of 1 for 5 periods at 8% is .681. What is the market or purchase price of the bonds upon acquisition?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of the current year, QUATRO Company purchased 5-year bonds with a face amount of ₱ 2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72; present value of an annuity of 1 for 10 periods at 4% is 8.11; present value of 1 for 10 periods at 4% is .676; present value of 1 for 10 periods at 5% is .614; present value of 1 for 5 periods at 10% is .621; present value of 1 for 5 periods at 8% is .681. What is the market or purchase price of the bonds upon acquisition?
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