On January 1,2019,Jason Company issued $5 million of 10-year bonds at a 10% coupon interest rate to be paid annually.The following present value factors have been provided:
- Calculate the issuance price if the market rate of interest was 10%.

Question

On January 1,2019,Jason Company issued $5 million of 10-year bonds at a 10% coupon interest rate to be paid annually.The following present value factors have been provided: 
- Calculate the issuance price if the market rate of interest was 10%.

Quizplus · Accepted Answer

Since the coupon rate and market rate are the same, the bond will be issued at par value, which is the face value of the bond, which is $5 million. Therefore, the issuance price is equal to the face value, which is $5,000,000.

On January 1,2019,Jason Company Issued $5 Million of 10-Year Bonds