Question

12A. On December 31, 2018, when the market interest rate is 10%, Derrick Corporation issues $240,000 of 7%, 12-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance. (Click the icon to view Present Value of $1 table.) 6 (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) 6 (Click the icon to view Future Value of Ordinary Annuity of $1 table.) Start by calculating the present value of the principal. (Enter factor amounts to three decimal places, X.XXX.) Value Factor = PV of principal Now calculate the present value of the stated interest. (Enter factor amounts to three decimal places, X.XXX.) Value X Semiannual interest ratex Factor = PV of stated interest % x = Finally, calculate the present value of bonds payable. PV of principal + PV of stated interest = PV of bonds payable +

Answer 1

Thus my: HAASEU is 3.5t of $249000 will be $ 2140.000 y 8.. 8400 Present wature of Anrwty factor Team is au, be cause maturity as 12 years and the Interest ee paid semi annually. So, pl. of Annuity factor PAP (51., 24) C Refer table -13.799 ) Present value of Interest payment - 13.799 x 840D = 116911.66 - Present value of Bonds payable sot a belt = Prof principle & Proof stated interest - 190312 (approx) 2 74,400 + 15912 The final price of the band value will change due to point we took while calculating annueity and Present value