Question
Frye company issued $700,000, 10%, 3 year bonds on January 1, 2017. Interest is payable annually on December 31. Frye uses the effective-interest method of
Frye company issued $700,000, 10%, 3 year bonds on January 1, 2017. Interest is payable annually on December 31. Frye uses the effective-interest method of amortization and has a calendar year end and the bonds were issued for an effective interest rate of 8%.
The selling price of the bond on January 1, 2017 is
a. $736,078
My question for this is how did the answer turn out to be 736,078? Can someone please show the steps involved to get this number? Its 700,000 * PV which is .79383 but when you multiply them together you get 555,683. Can someone please help me with the steps to get to the correct answer.
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
20th Edition
1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870
