Exercise 9-18A Calculate the issue price of bonds (LO9-7)

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On January 1, 2021, Frontier World issues $41 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.

Exercise 9-18A Part 3

3-a. If the market rate is 10%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions.)

3-b. The bonds will issue at

• A Premium

• Face amount

• A Discount

3a. If the market rate is 10%, calculate the issue price. (FV of $1, PV of $1. EVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions.) Bond Characteristics Face amount Interest payment Periods to maturity Market interest rate Issue price Amount $ 41,000,000 3-b. The bonds will issue at O A Premium Face amount O A Discount