On January 1, 2018, Sofya Company purchased 10-year bonds with a face value of P1,000,000 and a stated interest rate of 8% per year payable semiannually July 1 and January 1. The bonds were acquired to yield 10%. Present value factors are as follows: PV of 1 for 10 periods at 10% .386 PV of 1 for 20 periods at 5% .377 PV of an annuity of 1 for 10 periods at 10% 6.145 PV of an annuity of 1 for 20 periods at 5% 12.462 What is the purchase price of the bonds?
6. On January 1, 2018, Sofya Company purchased 10-year bonds with a face value of P1,000,000 and a stated interest rate of 8% per year payable semiannually July 1 and January 1. The bonds were acquired to yield 10%. Present value factors are as follows:
PV of 1 for 10 periods at 10% .386
PV of 1 for 20 periods at 5% .377
PV of an annuity of 1 for 10 periods at 10% 6.145
PV of an annuity of 1 for 20 periods at 5% 12.462
What is the purchase price of the bonds?
7. On January 1, 2018, Bailey Company purchased bonds with face value of P2,000,000. The bonds are dated January 1, 2018 and mature on January 1, 2022. The interest on the bonds is 10% payable semiannually every June 30 and December 31. The prevailing market rate of interest on the bonds is 12%. The present value of 1 at 6% for 8 periods is .63, and the present value of an ordinary annuity of 1 at 6% for 8 periods is 6.21.
What is the present
8. On January 1, 2018, Lamar Company purchased 5-year bonds with face value of P8, 000,000 and stated interest of 10% per year payable semiannually January 1 and July 1. The bonds were acquired to yield 8%. Present value factors are:
PV of an annuity of 1 for 10 periods at 5% 7.72
PV of an annuity of 1 for 10 periods at 4% 8.11
PV of 1 for 10 periods at 4% 0.6756
a. what is the purchase price of the bonds?
b. what is the carrying amount of the bond investment on December 31, 2018?
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