Question
On January 1, 2017, Bramble Corp. issued eight-year bonds with a face value of $6120000 and a stated interest rate of 10%, payable semiannually on
On January 1, 2017, Bramble Corp. issued eight-year bonds with a face value of $6120000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%.
Table values are:
Present value of 1 for 8 periods at 10% 0.467
Present value of 1 for 8 periods at 12% 0.404
Present value of 1 for 16 periods at 5% 0.458
Present value of 1 for 16 periods at 6% 0.394
Present value of annuity for 8 periods at 10% 5.335
Present value of annuity for 8 periods at 12% 4.968
Present value of annuity for 16 periods at 5% 10.838
Present value of annuity for 16 periods at 6% 10.106
The issue price of the bonds is: a) $6123060 b) $5503716 c) $5512896 d) $5564916
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