Please don't give answer in image format and it should be in step by step format and provide fast solution ### Calculating Bond Issue Prices#### Part 1**Scenario:**On April 1, 2023, ET Inc. has a bond issue of $332,000 due in four years. Interest at the rate of 4.0% is to be paid quarterly. Calculate the issue price if the market interest rate is as follows:- Do not round intermediate calculations.- Round the final answers to the nearest whole dollar.**Table:**| Market Interest Rate | Issue Price of the Bonds ||----------------------|--------------------------|| a. 5% | || b. 4% | || c. 3% | |#### Part 2**Scenario:**On October 1, ET Inc. has a bond issue of $314,000 due in eight years. Interest at the rate of 3.5% is to be paid semiannually. Calculate the issue price if the market interest rate is as follows:- Do not round intermediate calculations.- Round the final answers to 2 decimal places.**Table:**| Market Interest Rate | Issue Price of the Bonds ||----------------------|--------------------------|| a. 2.5% | || b. 3.5% | || c. 4.25% | |**Instructions:**1. **Determine Payment Amounts:** - For Part 1 (quarterly payments), calculate the interest payment per quarter by dividing the annual interest rate by 4. - For Part 2 (semiannual payments), calculate the interest payment per half-year by dividing the annual interest rate by 2.2. **Calculate Present Value:** - Use the market interest rate to discount the future payments and the face value of the bond.3. **Round Appropriately:** - Ensure intermediate calculations are not rounded. - For Part 1, round the final answer to the nearest whole dollar. - For Part 2, round the final answer to 2 decimal places.This example teaches the concepts of bond pricing under different market conditions and the importance of accurate calculations.

Bond valuation (BV) refers to a method or technique which is used to compute the current value or…

Part 1 On April 1, 2023, ET Inc. has available for issue $332,000 bonds due in four years. Interest at the rate of 4.0% is to be paid quarteri Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) a. b. C. Market Interest Rate 5% Part 2 a. b. C. 3% On Oct ber ET Inc. has available for issue a $314,000 bond due in eight years. Interest at the rate of 3.5% is to be paid semiannua Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to 2 decir places.) Issue Price of the Bonds Market Interest Issue Price of the Bonds Rate 2.5% 3.5% 4.25%

Part 1 On April 1, 2023, ET Inc. has available for issue $332,000 bonds due in four years. Interest at the rate of 4.0% is to be paid quarteri Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) a. b. C. Market Interest Rate 5% Part 2 a. b. C. 3% On Oct ber ET Inc. has available for issue a $314,000 bond due in eight years. Interest at the rate of 3.5% is to be paid semiannua Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to 2 decir places.) Issue Price of the Bonds Market Interest Issue Price of the Bonds Rate 2.5% 3.5% 4.25%

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.2E

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