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Un January 1, 2014, Excellent Company purchased scrial bonds with face amount of P5,000,000 and statcd interest at, 12%. The stated interest is payable annually ón Deceinber 31. The bonds are acquired to have an effective yield at 10%. The bonds mature at annual installment of P1,250,000 every

Un January 1, 2014, Excellent Company purchased scrial bonds with face amount of P5,000,000 and statcd interest at, 12%. The stated interest is payable annually ón Deceinber 31. The bonds are acquired to have an effective yield at 10%. The bonds mature at annual installment of P1,250,000 every

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 24-34 (IAA) On January 1, 2014, Excellent Company purchased serial bonds with face amount of P5,000,000 and stated interest at 12%. The stated interest is payable annually ón Decenber 31. The bonds are acquired to have an effective yield at 10%. The bonds mature at annual installment of P1,250,000 every December 31. Present value of 1 at 10% for one period Present value of 1 at 10% for two periods Present value of 1 at 10% for three periods Present value of 1 at 10% for four periods 0.9091 0.8264 0.7513 0.6830 What is the market price of the serial bonds on acquisitien date? a. 5,207,430 b. 5,090,960 C. 5,545,4G0 d, 5,000,000
Transcribed Image Text:Problem 24-34 (IAA) On January 1, 2014, Excellent Company purchased serial bonds with face amount of P5,000,000 and stated interest at 12%. The stated interest is payable annually ón Decenber 31. The bonds are acquired to have an effective yield at 10%. The bonds mature at annual installment of P1,250,000 every December 31. Present value of 1 at 10% for one period Present value of 1 at 10% for two periods Present value of 1 at 10% for three periods Present value of 1 at 10% for four periods 0.9091 0.8264 0.7513 0.6830 What is the market price of the serial bonds on acquisitien date? a. 5,207,430 b. 5,090,960 C. 5,545,4G0 d, 5,000,000
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