Periods 4%0.961540.924561234567690810Present Value of $1 at Compound Interest5½2%11%10%0.90909 0.900900.82645 0.811624½2%5%6%6½%7%0.95694 0.95238 0.94787 0.94340 0.93897 0.934580.91573 0.90703 0.89845 0.89000 0.88166 0.873440.88900 0.87630 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.731190.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 0.683010.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 0.620920.79031 0.76790 0.74622 0.72525 0.70496 0.68533 0.66634 0.564470.75992 0.73483 0.71068 0.68744 0.66506 0.64351 0.62275 0.513160.73069 0.70319 0.67684 0.65160 0.62741 0.60423 0.58201 0.466510.70259 0.67290 0.64461 0.61763 0.59190 0.56735 0.54393 0.424100.61391 0.58543 0.55839 0.53273 0.50835 0.385540.675560.64393EXHIBIT 812%13%0.892860.884960.79719 0.783150.711780.65873 0.635520.59345 0.567430.53464 0.506630.48166 0.452350.43393 0.403880.39092 0.360610.35218 0.321970.693050.613320.542760.480320.425060.376160.332880.29459 Present Value of Bonds Payable; PremiumMoss Co. issued $105,000 of five-year, 12% bonds with interest payable semiannually, at a market (effective) interest rate of 11%.Determine the present value of the bonds payable using the present value tables in Exhibit 8 and Exhibit 10. Round to the nearest dollar.

BOND Bond is a type of Financial Securities which is generally issued by the Governments,…

Answered: Determine the present value of the…

Determine the present value of the bonds payable using the present value tables in Exhibit 8 and Exhibit 10. Round to the nearest dollar.

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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Concept explainers

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:

Question

100%

Periods 4%
0.96154
0.92456
1
2
3
4
5
6
7690
8
10
Present Value of $1 at Compound Interest
5½2%
11%
10%
0.90909 0.90090
0.82645 0.81162
4½2%
5%
6%
6½%
7%
0.95694 0.95238 0.94787 0.94340 0.93897 0.93458
0.91573 0.90703 0.89845 0.89000 0.88166 0.87344
0.88900 0.87630 0.86384 0.85161 0.83962 0.82785 0.81630 0.75131 0.73119
0.85480 0.83856 0.82270 0.80722 0.79209 0.77732 0.76290 0.68301
0.82193 0.80245 0.78353 0.76513 0.74726 0.72988 0.71299 0.62092
0.79031 0.76790 0.74622 0.72525 0.70496 0.68533 0.66634 0.56447
0.75992 0.73483 0.71068 0.68744 0.66506 0.64351 0.62275 0.51316
0.73069 0.70319 0.67684 0.65160 0.62741 0.60423 0.58201 0.46651
0.70259 0.67290 0.64461 0.61763 0.59190 0.56735 0.54393 0.42410
0.61391 0.58543 0.55839 0.53273 0.50835 0.38554
0.67556
0.64393
EXHIBIT 8
12%
13%
0.89286
0.88496
0.79719 0.78315
0.71178
0.65873 0.63552
0.59345 0.56743
0.53464 0.50663
0.48166 0.45235
0.43393 0.40388
0.39092 0.36061
0.35218 0.32197
0.69305
0.61332
0.54276
0.48032
0.42506
0.37616
0.33288
0.29459

Present Value of Bonds Payable; Premium
Moss Co. issued $105,000 of five-year, 12% bonds with interest payable semiannually, at a market (effective) interest rate of 11%.
Determine the present value of the bonds payable using the present value tables in Exhibit 8 and Exhibit 10. Round to the nearest dollar.

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