Question
On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $6,000,000 and a stated interest rate of 6%, payable annually on
On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $6,000,000 and a stated interest rate of 6%, payable annually on December 31. The bonds were sold to yield 8%. Table values are:
Present value of 1 for 8 periods at6%............................................627
Present value of 1 for 8 periods at8%............................................540
Present value of 1 for 16 periods at3%..........................................623
Present value of 1 for 16 periods at4%..........................................534
Present value of annuity for 8 periods at6%.................................6.210
Present value of annuity for 8 periods at8%.................................5.747
Present value of annuity for 16 periods at3%...............................12.561
Present value of annuity for 16 periods at4%...............................11.652
The present value of the interest is
$2,068,920
$2,097,360
$2,235,600
$2,260,980
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started