On July 1, 2020, Chikadora Company issued P4M of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. The company uses the calendar year and the effective interest method of amortization. PV of 1 at 7% for 10 periods is P0.50835 PV of 1 at 14% for 5 periods is P0.51937 PV of an ordinary annuity of 1 at 7% for 10 periods is 7.02359 PV of an ordinary annuity of 1 at 14% for 5 periods is 3.43308 What is the issue price of the bond? a.)n P3,719,051 b.) P4,000,000 c.) P4,280,949 d.) P4,274,651
On July 1, 2020, Chikadora Company issued P4M of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. The company uses the calendar year and the effective interest method of amortization. PV of 1 at 7% for 10 periods is P0.50835 PV of 1 at 14% for 5 periods is P0.51937 PV of an ordinary annuity of 1 at 7% for 10 periods is 7.02359 PV of an ordinary annuity of 1 at 14% for 5 periods is 3.43308 What is the issue price of the bond? a.)n P3,719,051 b.) P4,000,000 c.) P4,280,949 d.) P4,274,651
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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14.On July 1, 2020, Chikadora Company issued P4M of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. The company uses the calendar year and the effective interest method of amortization.
PV of 1 at 7% for 10 periods is P0.50835
PV of 1 at 14% for 5 periods is P0.51937
PV of an ordinary annuity of 1 at 7% for 10 periods is 7.02359
PV of an ordinary annuity of 1 at 14% for 5 periods is 3.43308
What is the issue price of the bond?
PV of 1 at 7% for 10 periods is P0.50835
PV of 1 at 14% for 5 periods is P0.51937
PV of an ordinary annuity of 1 at 7% for 10 periods is 7.02359
PV of an ordinary annuity of 1 at 14% for 5 periods is 3.43308
What is the issue price of the bond?
a.)n P3,719,051
b.) P4,000,000
c.) P4,280,949
d.) P4,274,651
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