On January 1, 2021, Cullumber Ltd. issued bonds with a maturity value of $8,900,000 when the market rate of interest was 4%. The bonds have a coupon (contractual) interest rate of 5% and mature on January 1, 2031. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. The company's year end is December 31. Calculate the issue price of the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.)
On January 1, 2021, Cullumber Ltd. issued bonds with a maturity value of $8,900,000 when the market rate of interest was 4%. The bonds have a coupon (contractual) interest rate of 5% and mature on January 1, 2031. Interest on the bonds is payable semi-annually on July 1 and January 1 of each year. The company's year end is December 31. Calculate the issue price of the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round final answer to 0 decimal places, e.g. 5,275.)
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, 2021, Cullumber Ltd. issued bonds with a maturity value of
$8,900,000 when the market rate of interest was 4%. The bonds have a
coupon (contractual) interest rate of 5% and mature on January 1, 2031.
Interest on the bonds is payable semi-annually on July 1 and January 1 of
each year. The company's year end is December 31.
Calculate the issue price of the bonds. (For calculation purposes, use 5
decimal places as displayed in the factor table provided. Round final
answer to 0 decimal places, e.g. 5,275.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fde7a3596-f1a7-4c5c-9c8c-dc95f7be91a2%2F5de2e136-4182-4737-8b20-31d7eee7e55d%2Fq9rd4za_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, Cullumber Ltd. issued bonds with a maturity value of
$8,900,000 when the market rate of interest was 4%. The bonds have a
coupon (contractual) interest rate of 5% and mature on January 1, 2031.
Interest on the bonds is payable semi-annually on July 1 and January 1 of
each year. The company's year end is December 31.
Calculate the issue price of the bonds. (For calculation purposes, use 5
decimal places as displayed in the factor table provided. Round final
answer to 0 decimal places, e.g. 5,275.)
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