Question
Use the following to answer questions 31-32: On January 1, 2020, Yellow Co. issued eight-year bonds with a face value of $6,000,000 and a stated
Use the following to answer questions 31-32:
On January 1, 2020, Yellow 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 |
| 31. | The present value of the principal is | |
|
| A) | $3,204,000. |
|
| B) | $3,240,000. |
|
| C) | $3,738,000. |
|
| D) | $3,762,000. |
| 32. | 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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