Ch 10 Issue price of bonds using present value tables in Appendix C

Accounting: Tools for Business Decision Making

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Unformatted text preview: Issue price of bonds using present value tables in Appendix C BEC-13, page C-16 $200,000, 9% 10 year bonds, semiannual interest, issued to yield effective rate of 8% (the market rate). a) The number of times (periods) interest will be paid. ___________ b) The effective rate per period. ___________ c) What table and what table factor would you use to compute the present value of the face value (i.e., the maturity value)? Table _________ Table Factor _________ d) What is the present value of the face value (maturity value) of the bonds? $___________ (show calculations) e) What are the cash interest payments per period? $___________ (show calculations) f) What table and what table factor would you use to compute the present value of the interest payments? Table _________ Table Factor _________ g) What is the present value of the interest payments? $___________ (show calculations) h) What is the issue price of the bonds? $_______________ (show calculations) Journal Entry to record issuance of bond: Accounts Dr Cr Issue price of bonds using present value tables in Appendix C...
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Ch 10 Issue price of bonds using present value tables in Appendix C

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