Question
On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, interest is payable
On January 1, 2020, Ellison Co. issued eight-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, interest is payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. 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:
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Auditing An Assertions Approach
Authors: G. William Glezen, Donald H. Taylor
7th Edition
047113421X, 978-0471134213
