FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise.

Determining the present value of bonds payable

Interest rates determine the present value of future amounts. (Round to the nearest dollar.)

Requirements

  1. Determine the present value of 10-year bonds payable with face value of $86,000 and stated interest rate of 14%, paid semiannually. The market rate of interest is 14% at issuance.
  2. Same bonds payable as in Requirement 1, but the market interest rate is 16%.
  3. Same bonds payable as in Requirement 1, but the market interest rate is 12%.
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