Issue Price - Whitworth International plans to issue $250,000 face value bonds with a stated interest rate of 10%. They will mature in 6 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12 %. Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. Due to differences in rounding when using the present value factors, you need to round your answer for the ISSUE PRICE in the first column only to the nearest 100 Market Rate 1. What is the amount due at maturity? 2. How much cash interest will be paid every sox months? 3. At what price will the bond be issued? 10% 8% 12%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Issue Price -
Whitworth International plans to issue $250,000 face value bonds with a stated interest rate of 10%. They will mature in 6 years. Interest will be paid semiannually. At the date of
issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%.
Use the appropriate present value table:
PV of $1 and PV of Annuity of $1
Required:
For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. Due to differences in rounding when using the present
value factors, you need to round your answer for the ISSUE PRICE in the first column only to the nearest 100
Market Rate
1. What is the amount due at maturity?
2. How much cash interest will be paid every sox months?
3. At what price will the bond be issued?
10%
8%
12%
Transcribed Image Text:Issue Price - Whitworth International plans to issue $250,000 face value bonds with a stated interest rate of 10%. They will mature in 6 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%. Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. Due to differences in rounding when using the present value factors, you need to round your answer for the ISSUE PRICE in the first column only to the nearest 100 Market Rate 1. What is the amount due at maturity? 2. How much cash interest will be paid every sox months? 3. At what price will the bond be issued? 10% 8% 12%
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