PowerTap Utilities is planning to issue bonds with a face value of $1,800,000 and a coupon rate of 7 percent. The bonds mature in 15 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8 percent. (EV of $1. PV of $1. EVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. What was the issue price on January 1 of this year? Note: Round your final answer to nearest whole dollar amount. Issue price
PowerTap Utilities is planning to issue bonds with a face value of $1,800,000 and a coupon rate of 7 percent. The bonds mature in 15 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8 percent. (EV of $1. PV of $1. EVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. What was the issue price on January 1 of this year? Note: Round your final answer to nearest whole dollar amount. Issue price
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject: accounting
![Required information
[The following information applies to the questions displayed below.]
PowerTap Utilities is planning to issue bonds with a face value of $1,800,000 and a coupon rate of 7 percent. The bonds.
mature in 15 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1
of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8
percent. (EV of $1. PV of $1. EVA of $1, and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Required:
1. What was the issue price on January 1 of this year?
Note: Round your final answer to nearest whole dollar amount.
Issue price](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fc66754-dc05-453a-a4c8-c79196bcb5d1%2Faef9c61e-dca3-41d3-89f4-f08011426def%2Fgrrqwhk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
PowerTap Utilities is planning to issue bonds with a face value of $1,800,000 and a coupon rate of 7 percent. The bonds.
mature in 15 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1
of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 8
percent. (EV of $1. PV of $1. EVA of $1, and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Required:
1. What was the issue price on January 1 of this year?
Note: Round your final answer to nearest whole dollar amount.
Issue price
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