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When the market rate of interest was 12%, Halprin Corporation issued $257,000, 11%, 10-year bonds that pay interest annually. Use the present value tables below. The selling price of this bond issue was?

Respuesta :

Answer:

$242,478

Explanation:

The computation of the selling price of this bond issue is shown below:-

Issue price of bonds = Present value of interest + Present value of maturity payment

= ($257,000 × 11% × 5.65022) + ($257,000 × 0.32197)

= $159,731.72 + $82,746.29

= $242,478.01

or

= $242,478

Therefore for computing the issue price of bonds we simply applied the above formula.

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