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ABC Inc. plans to issue $500,000 face value bonds with a stated interest rate of...

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Accounting

ABC Inc. plans to issue $500,000 face value bonds with a stated interest rate of 12% and market interest rate of 10%. They will mature in 10 years. Interest will be paid semiannually. At the date of issuance, compute the present value (bond issue price) of the future cash flows. Following are appropriate factors from tables:

Table

% / n

Present Value of $1

Present Value of ordinary annuity of $1

10%/10

.38554

6.14457

12%/10

.32197

5.65022

5%/20

.37689

12.46221

6%/20

.31180

11.46992

Required Computation:

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