Scottie Adams Bird Supplies issued 10% bonds, dated January 1, with a face amount of $240,000 on January 1, 2018. The bonds mature in 2028 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. What is the price of the bonds at January 1, 2018? Some relevant and irrelevant present value factors: * PV of annuity due of $1: n = 20; i = 6% is 12.15812
* PV of ordinary annuity of $1: n = 20; i = 6% is 11.46992
**PV of $1: n = 20; i = 6% is 0.31180

Question

Quizplus · Accepted Answer

Semiannual: 10%/2 = 5%. 12%/2 = 6%. 11ea937b_35f7_9570_a419_1f2d2b1a8cc0_TB2599_00 ^¥ 5% × $240,000 * PV of ordinary annuity of $1: n = 20; i = 6% **PV of $1: n = 20; i = 6%

Scottie Adams Bird Supplies Issued 10% Bonds, Dated January 1