Question
On January 1, 2020, Carrera Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 8%, payable semiannually on
On January 1, 2020, Carrera Co. issued eight-year bonds with a face value of $1,000,000 and a stated interest rate of 8%, payable semiannually on June 30 and December 31. The bonds were sold to an yield 6% effective rate.
Use the following table values below to calculate your answer and to avoid rounding errors. Not all table values will be used, however.
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 bonds is?
Use comma separators but no dollar signs and round to the nearest dollar.
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