On January 1, 2022, P Corp. issued eight-year, 3% bonds with a face value of $400,000, with interest payable semi-annually on June 30 and December 31. The bonds were sold to yield 4%. Table values are: Present value of 1 for 8 periods at 3% Present value of 1 for 8 periods at 4% Present value of 1 for 16 periods at 1.5% Present value of 1 for 16 periods at 2% Present value of annuity for 8 periods at 3% Present value of annuity for 8 periods at 2% 7.325 Present value of annuity for 16 periods at 1.5% 14.131 Present value of annuity for 16 periods at 2% 13.578 What is the issue price of the bond? .789 .731 .788 .728 7.020
On January 1, 2022, P Corp. issued eight-year, 3% bonds with a face value of $400,000, with interest payable semi-annually on June 30 and December 31. The bonds were sold to yield 4%. Table values are: Present value of 1 for 8 periods at 3% Present value of 1 for 8 periods at 4% Present value of 1 for 16 periods at 1.5% Present value of 1 for 16 periods at 2% Present value of annuity for 8 periods at 3% Present value of annuity for 8 periods at 2% 7.325 Present value of annuity for 16 periods at 1.5% 14.131 Present value of annuity for 16 periods at 2% 13.578 What is the issue price of the bond? .789 .731 .788 .728 7.020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2022, P Corp. issued eight-year, 3% bonds with a face value of $400,000, with interest payable semi-annually on June 30 and December 31. The bonds
were sold to yield 4%. Table values are:
Present value of 1 for 8 periods at 3%
Present value of 1 for 8 periods at 4%
Present value of 1 for 16 periods at 1.5%
Present value of 1 for 16 periods at 2%
Present value of annuity for 8 periods at 3%
Present value of annuity for 8 periods at 2%
Present value of annuity for 16 periods at 1.5% 14.131
Present value of annuity for 16 periods at 2%
13.578
What is the issue price of the bond?
.789
.731
.788
.728
7.020
7.325
Transcribed Image Text:What is the issue price of the bond?
$372,668
$81,468
$320,000
$291,200
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