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26-28 On January 1, 2014, Ellison Co. issued eight-year bonds with a face value of $3,000,000 and a stated interest rate of 6%, payable semiannually
26-28 On January 1, 2014, Ellison Co. issued eight-year bonds with a face value of $3,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: .627 .540 .623 .534 6.210 5.747 Present value of 1 for 8 periods at 6% Present value of 1 for 8 periods at 8% Present value of 1 for 16 periods at 3% Present value of 1 for 16 periods at 4% Present value of annuity for 8 periods at 6% Present value of annuity for 8 periods at 8% Present value of annuity for 16 periods at 3% Present value of annuity for 16 periods at 4% The present value of the principal is a $2,136,000 $1,602,000 $2,492,000. $1,508,000 12.561 11.652 b. The present value of the interest is $1,048,680. $1,398,240. $1,390,400. $1,307,320. d. The issue price of the bonds is $3,534,240. $2,650,680. $3,558,240. $2,998,400
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