On January 1,2009,Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually.The following present value factors have been provided:

$$\begin{array}{ll }
\begin{array} { ll }
\text { Time Period } & \text { Interest } \
10 & 10 \% \
10 & 8 \% \
10 & 12 \%
\end{array}
\begin{array} { l l }
\text { PV of } \$ 1 & \text { PV of a } \$ 1 \text { Annuity } \
.386 & 6.145 \
.463 & 6.710 \
.322 & 5.650
\end{array}
\end{array}$$
What was the issuance price of the bonds if the market rate of interest was 8%?
A)$5,000,000
B)$5,670,000
C)$5,387,500
D)$5,712,500

Question

On January 1,2009,Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually.The following present value factors have been provided:

$$\begin{array}{ll }
\begin{array} { ll  } 
\text { Time Period } & \text { Interest } \
10 & 10 \% \
10 & 8 \% \
10 & 12 \%
\end{array}
\begin{array} { l l } 
\text { PV of } \$ 1 & \text { PV of a } \$ 1 \text { Annuity } \
.386 & 6.145 \
.463 & 6.710 \
.322 & 5.650
\end{array}
\end{array}$$
 What was the issuance price of the bonds if the market rate of interest was 8%?
A)$5,000,000
B)$5,670,000
C)$5,387,500
D)$5,712,500

Quizplus · Accepted Answer

The Answer of On January 1,2009,Jason Company issued $5 million of 10-year bonds at a 10% stated interest rate to be paid annually.The following present value factors have been provided:

$$\begin{array}{ll }
\begin{array} { ll  } 
\text { Time Period } & \text { Interest } \
10 & 10 \% \
10 & 8 \% \
10 & 12 \%
\end{array}
\begin{array} { l l } 
\text { PV of } \$ 1 & \text { PV of a } \$ 1 \text { Annuity } \
.386 & 6.145 \
.463 & 6.710 \
.322 & 5.650
\end{array}
\end{array}$$
 What was the issuance price of the bonds if the market rate of interest was 8%?
A)$5,000,000
B)$5,670,000
C)$5,387,500
D)$5,712,500

On January 1,2009,Jason Company Issued $5 Million of 10-Year Bonds