Question
On January 1, 2017, Ellison Co. issued eight-year bonds with a face value of $6,000,000 and a stated interest rate of 6%, payable semiannually on
On January 1, 2017, Ellison Co. issued eight-year bonds with a face value of $6,000,000 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
61.The present value of the interest is
a.$2,068,920.
b.$2,097,360.
c.$2,235,600.
d.$2,260,980.
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