On January 1, 2009, Delta Company issued its P10,000,000 face amount, 10% bonds to yield 8% per year. The bonds mature on January 1, 2014, that pays interest semiannually on June 30 and December 31. The relevant present value factors are as follows: Present value of 1 at 4% for 10 periods .6756 Present value for an ordinary annuity at 4% for 10 8.11 periods Present value of 1 at 5% for 10 periods .6139 Present value for an ordinary annuity at 5% for 10 7.72 periods What is the carrying amount of this bond liability (rounded to the nearest thousand) on January 1, 2009?
On January 1, 2009, Delta Company issued its P10,000,000 face amount, 10% bonds to yield 8% per year. The bonds mature on January 1, 2014, that pays interest semiannually on June 30 and December 31. The relevant present value factors are as follows: Present value of 1 at 4% for 10 periods .6756 Present value for an ordinary annuity at 4% for 10 8.11 periods Present value of 1 at 5% for 10 periods .6139 Present value for an ordinary annuity at 5% for 10 7.72 periods What is the carrying amount of this bond liability (rounded to the nearest thousand) on January 1, 2009?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 5P
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On January 1, 2009, Delta Company issued its P10,000,000 face amount, 10% bonds to yield 8% per year. The bonds mature on January 1, 2014, that pays interest semiannually on June 30 and December 31. The relevant present value factors are as follows:
Present value of 1 at 4% for 10 periods .6756
Present value for an ordinary annuity at 4% for 10 8.11 periods
Present value of 1 at 5% for 10 periods .6139
Present value for an ordinary annuity at 5% for 10 7.72 periods
What is the carrying amount of this bond liability (rounded to the nearest thousand) on January 1, 2009?
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