On January 1, a company issues bonds dated January 1 with a par value of...
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Accounting
On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8%. Using the present value factors below, the issue (selling) price of the bonds is:
n=
i=
Present Value of an Annuity
Present value of $1
3
7.0
%
2.6243
0.8163
6
3.5
%
5.3286
0.8135
3
8.0
%
2.5771
0.7938
6
4.0
%
5.2421
0.7903
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