At the beginning of the current year, Chacha Company purchased 5-year bonds with a face amount of $2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72: present value of an annuity of 1 for 10 periods at 4% is 8.11: present value of 1 for 10 periods at 4% is .676: present value of 1 for 10 periods at 5% is .614: present value of 1 for 5 periods at 10% is 621: present value of 1 for 5 periods at 8% is .681. What is the interest income for the current year? (Round off answer to the nearest whole number).
At the beginning of the current year, Chacha Company purchased 5-year bonds with a face amount of $2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72: present value of an annuity of 1 for 10 periods at 4% is 8.11: present value of 1 for 10 periods at 4% is .676: present value of 1 for 10 periods at 5% is .614: present value of 1 for 5 periods at 10% is 621: present value of 1 for 5 periods at 8% is .681. What is the interest income for the current year? (Round off answer to the nearest whole number).
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
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At the beginning of the current year, Chacha Company purchased 5-year bonds with a face amount of $2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72: present value of an annuity of 1 for 10 periods at 4% is 8.11: present value of 1 for 10 periods at 4% is .676: present value of 1 for 10 periods at 5% is .614: present value of 1 for 5 periods at 10% is 621: present value of 1 for 5 periods at 8% is .681. What is the interest income for the current year? (Round off answer to the nearest whole number).
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