On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $4,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6%.... .627 Present value of 1 for 8 periods at 8%....... periods at 3%.. 4%... .540 Present value of 1 for 16 .623 Present value of 1 for 16 periods at .534 Present value of annuity for 8 periods at 6%.... 6.210 5.747 Present value of annuity for 16 Present value of annuity for 8 periods at 8%...... periods at 3%....... 11.652 Compute the present value of the interest payments. . 12.561 Present value of annuity for 16 periods at 4%.....

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $4,000,000 and a
stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were
sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6%...
.627 Present value of 1 for 8 periods at 8%.......
periods at 3%..
4%...
.540 Present value of 1 for 16
.623 Present value of 1 for 16 periods at
.534 Present value of annuity for 8 periods at 6%....
6.210
5.747 Present value of annuity for 16
Present value of annuity for 8 periods at 8%......
periods at 3%....
11.652
Compute the present value of the interest payments.
12.561 Present value of annuity for 16 periods at 4%......
Transcribed Image Text:On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $4,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6%... .627 Present value of 1 for 8 periods at 8%....... periods at 3%.. 4%... .540 Present value of 1 for 16 .623 Present value of 1 for 16 periods at .534 Present value of annuity for 8 periods at 6%.... 6.210 5.747 Present value of annuity for 16 Present value of annuity for 8 periods at 8%...... periods at 3%.... 11.652 Compute the present value of the interest payments. 12.561 Present value of annuity for 16 periods at 4%......
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