On January 1, a Company Issues Bonds Dated January 1

question 234

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 3 years. The contract rate is 4%, and interest is paid semiannually on June 30 and December 31. The market rate is 5%. Using the present value factors below, the issue (selling) price of the bonds is: n= i=
Present Value of an
Annuity Present value of $1
3 4) 0 % 2.7751 0.8890
6 2) 0 % 5.6014 0.8880
3 5) 0 % 2.7232 0.8638
6 2) 5 % 5.5081 0.8623

• A) $172,460.
• B) $194,492.
• C) $22,032.
• D) $205,607.
• E) $200,000.

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Definitions:

Cartilaginous

Describing a type of tissue that is not as hard as bone but provides flexibility and support; it is found in areas like the ears, nose, and joints.

Complex

A group of interconnected entities or a composite material formed from two or more substances with combined properties.

Ball and Socket

A type of joint that allows for rotational movement, as seen in the hip or shoulder joint.

Multiaxial

Describing joints that allow movement around multiple axes and planes.