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The following terms relate to independent bond issues: 530 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 530 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 780 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,070 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue a. $fill in the blank 1 b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4

The following terms relate to independent bond issues: 530 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 530 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 780 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,070 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue a. $fill in the blank 1 b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4

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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Issue Price

The following terms relate to independent bond issues:

  1. 530 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments
  2. 530 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments
  3. 780 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments
  4. 2,070 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments

Use the appropriate present value table:

PV of $1 and PV of Annuity of $1

Required:

Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar.

Situation Selling Price of the Bond Issue
a. $fill in the blank 1
b. $fill in the blank 2
c. $fill in the blank 3
d. $fill in the blank 4

 

TABLE 9-2 Present Value of $1 (N) Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 24 26 28 30 2% 98039 96117 94232 92385 90573 .88797 .87056 .85349 83676 .82035 .80426 78849 .77303 .75788 74301 .72845 .71416 70016 .68643 .67297 .64684 .62172 59758 57437 55207 3% 97087 94260 91514 88849 .86261 .83748 .81309 78941 76642 74409 .72242 70138 .68095 .66112 .64186 .62317 .60502 58739 57029 55368 52189 49193 46369 43708 41199 4% 96154 92456 .88900 .85480 .82193 .79031 .75992 .73069 .70259 .67556 .64958 .62480 .60057 57748 55526 53391 51337 49363 47464 45639 42196 39012 36069 33348 30832 5% 95238 90703 86384 .82270 78353 .74622 .71068 .67684 .64461 .61391 58468 55684 53032 50507 48102 45811 43630 41552 39573 37689 34185 31007 28124 25509 23138 6% 94340 89000 .83962 .79209 .74726 .70496 .66506 .62741 59190 55839 52679 49697 46884 44230 41727 39365 37136 35034 33051 31180 27751 24698 21981 .19583 .17411 7% .93458 .87344 .81630 .76290 .71299 .66634 .62275 .58201 .54393 .50835 47509 .44401 .41496 .38782 .36245 .33873 .31657 29586 .27651 25842 .22571 .19715 17220 .15040 .13137 8% .92593 .85734 .79383 73503 .68058 .63017 .58349 .54027 50025 .46319 .42888 .39711 .36770 .34046 .31524 .29189 27027 .25025 .23171 21455 .18394 .15770 .13520 .11591 .09938 10% .90909 .82645 .75131 .68301 .62092 .56447 51316 .46651 .42410 .38554 35049 .31863 .28966 26333 23939 .21763 .19784 .17986 .16351 .14864 .12285 .10153 .08391 .06934 .05731 12% .89286 .79719 .71178 .63552 .56743 .50663 .45235 .40388 .36061 .32197 28748 .25668 22917 .20462 .18270 .16312 .14564 .13004 .11611 .10367 .08264 .06588 05252 .04187 03338 15% .86957 .75614 .65752 57175 49718 43233 37594 32690 28426 24718 21494 .18691 16253 .14133 .12289 .10686 09293 08081 07027 .06110 04620 03493 02642 .01997 01510
Transcribed Image Text:TABLE 9-2 Present Value of $1 (N) Periods 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 22 24 26 28 30 2% 98039 96117 94232 92385 90573 .88797 .87056 .85349 83676 .82035 .80426 78849 .77303 .75788 74301 .72845 .71416 70016 .68643 .67297 .64684 .62172 59758 57437 55207 3% 97087 94260 91514 88849 .86261 .83748 .81309 78941 76642 74409 .72242 70138 .68095 .66112 .64186 .62317 .60502 58739 57029 55368 52189 49193 46369 43708 41199 4% 96154 92456 .88900 .85480 .82193 .79031 .75992 .73069 .70259 .67556 .64958 .62480 .60057 57748 55526 53391 51337 49363 47464 45639 42196 39012 36069 33348 30832 5% 95238 90703 86384 .82270 78353 .74622 .71068 .67684 .64461 .61391 58468 55684 53032 50507 48102 45811 43630 41552 39573 37689 34185 31007 28124 25509 23138 6% 94340 89000 .83962 .79209 .74726 .70496 .66506 .62741 59190 55839 52679 49697 46884 44230 41727 39365 37136 35034 33051 31180 27751 24698 21981 .19583 .17411 7% .93458 .87344 .81630 .76290 .71299 .66634 .62275 .58201 .54393 .50835 47509 .44401 .41496 .38782 .36245 .33873 .31657 29586 .27651 25842 .22571 .19715 17220 .15040 .13137 8% .92593 .85734 .79383 73503 .68058 .63017 .58349 .54027 50025 .46319 .42888 .39711 .36770 .34046 .31524 .29189 27027 .25025 .23171 21455 .18394 .15770 .13520 .11591 .09938 10% .90909 .82645 .75131 .68301 .62092 .56447 51316 .46651 .42410 .38554 35049 .31863 .28966 26333 23939 .21763 .19784 .17986 .16351 .14864 .12285 .10153 .08391 .06934 .05731 12% .89286 .79719 .71178 .63552 .56743 .50663 .45235 .40388 .36061 .32197 28748 .25668 22917 .20462 .18270 .16312 .14564 .13004 .11611 .10367 .08264 .06588 05252 .04187 03338 15% .86957 .75614 .65752 57175 49718 43233 37594 32690 28426 24718 21494 .18691 16253 .14133 .12289 .10686 09293 08081 07027 .06110 04620 03493 02642 .01997 01510
TABLE 9-4 Present Value of Annuity of $1 (N) Periods 1 2 3 4 5 6 7 8 9 1123 10 13 14 15 16 17 17 18 19 20 22 24 26 28 30 2% 98039 97087 .90909 .89286 1.94156 1.91347 1.73554 1.69005 2.88388 2.82861 2.57710 2.48685 2.40183 3.71710 3.31213 3.16987 3.03735 3.80773 4.71346 4.57971 3.54595 3.46511 4.21236 3.38721 4.10020 3.99271 3.79076 3.60478 5.60143 5.07569 4.91732 4.62288 4.35526 4.11141 6.47199 5.78637 5.58238 4.76654 5.38929 5.97130 5.20637 4.86842 4.56376 6.46321 6.20979 5.74664 5.33493 4.96764 7.32548 8.16224 7.78611 7.10782 6.80169 6.51523 6.24689 5.75902 5.32825 8.11090 7.72173 7.36009 7.02358 6.71008 6.14457 5.65022 7.49867 7.13896 6.49506 5.93770 8.98259 8.53020 9.78685 9.25262 8.76048 8.30641 7.88687 10.57534 9.95400 9.38507 8.86325 11.34837 10.63496 9.98565 11.29607 10.56312 8.38384 7.94269 6.81369 6.19437 7.53608 7.90378 7.10336 9.39357 8.85268 8.35765 6.42355 12.10625 9.89864 9.29498 8.74547 7.36669 6.62817 8.24424 8.55948 12.84926 7.60608 6.81086 13.57771 8.85137 7.82371 6.97399 11.93794 11.11839 10.37966 12.56110 11.65230 14.29187 13.16612 12.16567 11.27407 13.75351 10.83777 10.10590 10.47726 9.12164 8.02155 7.11963 14.99203 12.65930 11.68959 10.82760 9.37189 8.20141 7.24967 15.67846 8.36492 7.36578 9.71225 9.10791 9.44665 9.76322 10.05909 14.32380 13.13394 12.08532 11.15812 10.33560 14.87747 13.59033 12.46221 11.46992 10.59401 17.65805 15.93692 14.45112 13.16300 12.04158 11.06124 10.20074 18.91393 16.93554 15.24696 13.79864 12.55036 11.46933 10.52876 20.12104 17.87684 15.98277 14.37519 13.00317 11.82578 10.80998 9.16095 7.89566 21.28127 18.76411 16.66306 14.89813 13.40616 12.13711 11.05108 9.30657 22.39646 19.60044 17.29203 15.37245 9.60360 9.81815 8.51356 16.35143 7.46944 8.77154 7.64465 8.98474 7.78432 7.98442 13.76483 12.40904 11.25778 9.42691 8.05518 3% 4% 5% 96154 95238 1.88609 1.85941 2.77509 2.72325 3.62990 4.45182 4.32948 5.41719 5.24214 6.23028 6.00205 7.01969 6.73274 7.43533 6% 7% 8% .94340 .92593 .93458 1.83339 1.80802 1.78326 2.67301 2.62432 10% 12% 15% 86957 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95423 6.04716 6.12797 6.19823 6.25933 6.35866 6.43377 6.49056 6.53351 6.56598
Transcribed Image Text:TABLE 9-4 Present Value of Annuity of $1 (N) Periods 1 2 3 4 5 6 7 8 9 1123 10 13 14 15 16 17 17 18 19 20 22 24 26 28 30 2% 98039 97087 .90909 .89286 1.94156 1.91347 1.73554 1.69005 2.88388 2.82861 2.57710 2.48685 2.40183 3.71710 3.31213 3.16987 3.03735 3.80773 4.71346 4.57971 3.54595 3.46511 4.21236 3.38721 4.10020 3.99271 3.79076 3.60478 5.60143 5.07569 4.91732 4.62288 4.35526 4.11141 6.47199 5.78637 5.58238 4.76654 5.38929 5.97130 5.20637 4.86842 4.56376 6.46321 6.20979 5.74664 5.33493 4.96764 7.32548 8.16224 7.78611 7.10782 6.80169 6.51523 6.24689 5.75902 5.32825 8.11090 7.72173 7.36009 7.02358 6.71008 6.14457 5.65022 7.49867 7.13896 6.49506 5.93770 8.98259 8.53020 9.78685 9.25262 8.76048 8.30641 7.88687 10.57534 9.95400 9.38507 8.86325 11.34837 10.63496 9.98565 11.29607 10.56312 8.38384 7.94269 6.81369 6.19437 7.53608 7.90378 7.10336 9.39357 8.85268 8.35765 6.42355 12.10625 9.89864 9.29498 8.74547 7.36669 6.62817 8.24424 8.55948 12.84926 7.60608 6.81086 13.57771 8.85137 7.82371 6.97399 11.93794 11.11839 10.37966 12.56110 11.65230 14.29187 13.16612 12.16567 11.27407 13.75351 10.83777 10.10590 10.47726 9.12164 8.02155 7.11963 14.99203 12.65930 11.68959 10.82760 9.37189 8.20141 7.24967 15.67846 8.36492 7.36578 9.71225 9.10791 9.44665 9.76322 10.05909 14.32380 13.13394 12.08532 11.15812 10.33560 14.87747 13.59033 12.46221 11.46992 10.59401 17.65805 15.93692 14.45112 13.16300 12.04158 11.06124 10.20074 18.91393 16.93554 15.24696 13.79864 12.55036 11.46933 10.52876 20.12104 17.87684 15.98277 14.37519 13.00317 11.82578 10.80998 9.16095 7.89566 21.28127 18.76411 16.66306 14.89813 13.40616 12.13711 11.05108 9.30657 22.39646 19.60044 17.29203 15.37245 9.60360 9.81815 8.51356 16.35143 7.46944 8.77154 7.64465 8.98474 7.78432 7.98442 13.76483 12.40904 11.25778 9.42691 8.05518 3% 4% 5% 96154 95238 1.88609 1.85941 2.77509 2.72325 3.62990 4.45182 4.32948 5.41719 5.24214 6.23028 6.00205 7.01969 6.73274 7.43533 6% 7% 8% .94340 .92593 .93458 1.83339 1.80802 1.78326 2.67301 2.62432 10% 12% 15% 86957 1.62571 2.28323 2.85498 3.35216 3.78448 4.16042 4.48732 4.77158 5.01877 5.23371 5.42062 5.58315 5.72448 5.84737 5.95423 6.04716 6.12797 6.19823 6.25933 6.35866 6.43377 6.49056 6.53351 6.56598
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