Question

Trew Company plans to issue bonds with a face value of $907,500 and a coupon rate of 6 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar.)

Answer 1

Answer:

$756,692

Explanation:

Calculation to determine the issuance price of the bonds

Principal $907,500×0.43499=$394,753

Add Interest $27,225×13.29437 =$361,939

ISSUED PRICE $756,692

($907,500 × 0.06 × ½ year=$27,225)

Therefore the issuance price of the bonds is $756,692