Exhibit 14-4 A $300, 000, ten-year, 6% bond issue was sold to yield 7% interest payable annually.Actuarial information for 10 periods is as follows:
$\begin{array}{lll}
&6\%&7\%\
\text { Present value of } 1 & .558 & .508 \
\text { Present value of an anmuity of } 1 & 7.360 & 7.024
\end{array}$
- Refer to Exhibit 14-4.These bonds sold at

Question

Quizplus · Accepted Answer

The bonds were sold to yield 7%, which is higher than the coupon rate of 6%. This means the bonds were sold at a discount, as investors are willing to pay less than the face value to achieve a higher yield.