Question
On January 1, 2013, Ellison Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semiannually on
On January 1, 2013, Ellison Co. issued eight-year bonds with a face value of $1,000,000 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:
Present value of 1 for 8 periods at 6%................................................ .627
Present value of 1 for 8 periods at 8%................................................ .540
Present value of 1 for 16 periods at 3%.............................................. .623
Present value of 1 for 16 periods at 4%.............................................. .534
Present value of annuity for 8 periods at 6%...................................... 6.210
Present value of annuity for 8 periods at 8%...................................... 5.747
Present value of annuity for 16 periods at 3%.................................... 12.561
Present value of annuity for 16 periods at 4%.................................... 11.652
The issue price of the bond is
| a. | $889,560 | |
| b. | $883,560 | |
| c. | $999,600 | |
| d. | $884,820 |
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CIA Part 1 Essentials Of Internal Auditing 2022
Authors: MUHAMMAD ZAIN
1st Edition
B09PHFC28N, 979-8794951356
