On January 1, a Company Issues 8%, 5 Year, $300,000

On January 1, a company issues 8%, 5 year, $300,000 bonds that pay interest semiannually each June 30 and December 31. On the issue date, the annual market rate of interest for the bonds is 10%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: $\begin{array}{|l|l|}\hline \text { Present value of an annuity for } 10 \text { periods at } 4 \% & 8.1109 \\\hline \text { Present value of an annuity for } 10 \text { periods at } 5 \% & 7.727 \\\hline \text { Present value of } 1 \text { for } 10 \text { periods at } 4 \% & 0.656 \\\hline \text { Present value of } 1 \text { for } 10 \text { periods at } 5 \% & 0.6139 \\\hline\end{array}$