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January 1, 2012 Kristy Corp is issuing 400,000 of 10% 3-year bonds with semiannual interest payments. Potential bond investors want a rate of 8% interest (market Rate).

14 AE10- 17 PV Bond B Kristy Assignment 400k 8% Prem Video XX

https://www.youtube.com/watch?v=PdoWQSF3-Ug&feature=youtu.be

Compute the market price (present value) of the bonds and the "Closing Price % of Face".

Calculate Present value of Bond payment at maturity: A

Caculate Present value of bi-annual Interest Payments:B

Market price (present value) of bonds = A+B

Journalize the issuance of the Bonds with a proper explanation which includes all info needed for someone to calculate the market value

Present Value of 1

 

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

1

0.97087

0.96618

0.96154

0.95694

0.95238

0.94787

0.94340

0.93897

0.93458

0.93023

0.92593

0.92166

0.91743

0.91324

0.90909

2

0.94260

0.93351

0.92456

0.91573

0.90703

0.89845

0.89000

0.88166

0.87344

0.86533

0.85734

0.84946

0.84168

0.83401

0.82645

3

0.91514

0.90194

0.88900

0.87630

0.86384

0.85161

0.83962

0.82785

0.81630

0.80496

0.79383

0.78291

0.77218

0.76165

0.75131

4

0.88849

0.87144

0.85480

0.83856

0.82270

0.80722

0.79209

0.77732

0.76290

0.74880

0.73503

0.72157

0.70843

0.69557

0.68301

 

5

0.86261

0.84197

0.82193

0.80245

0.78353

0.76513

0.74726

0.72988

0.71299

0.69656

0.68058

0.66505

0.64993

0.63523

0.62092

6

0.83748

0.81350

0.79031

0.76790

0.74622

0.72525

0.70496

0.68533

0.66634

0.64796

0.63017

0.61295

0.59627

0.58012

0.56447

7

0.81309

0.78599

0.75992

0.73483

0.71068

0.68744

0.66506

0.64351

0.62275

0.60275

0.58349

0.56493

0.54703

0.52979

0.51316

8

0.78941

0.75941

0.73069

0.70319

0.67684

0.65160

0.62741

0.60423

0.58201

0.56070

0.54027

0.52067

0.50187

0.48382

0.46651

9

0.76642

0.73373

0.70259

0.67290

0.64461

0.61763

0.59190

0.56735

0.54393

0.52158

0.50025

0.47988

0.46043

0.44185

0.42410

10

0.74409

0.70892

0.67556

0.64393

0.61391

0.58543

0.55839

0.53273

0.50835

0.48519

0.46319

0.44229

0.42241

0.40351

0.38554

Present Value of an Annuity of 1

 

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

1

0.97087

0.96618

0.96154

0.95694

0.95238

0.94787

0.94340

0.93897

0.93458

0.93023

0.92593

0.92166

0.91743

0.91324

0.90909

2

1.91347

1.89969

1.88609

1.87267

1.85941

1.84632

1.83339

1.82063

1.80802

1.79557

1.78326

1.77111

1.75911

1.74725

1.73554

3

2.82861

2.80164

2.77509

2.74896

2.72325

2.69793

2.67301

2.64848

2.62432

2.60053

2.57710

2.55402

2.53129

2.50891

2.48685

4

3.71710

3.67308

3.62990

3.58753

3.54595

3.50515

3.46511

3.42580

3.38721

3.34933

3.31213

3.27560

3.23972

3.20448

3.16987

5

4.57971

4.51505

4.45182

4.38998

4.32948

4.27028

4.21236

4.15568

4.10020

4.04588

3.99271

3.94064

3.88965

3.83971

3.79079

6

5.41719

5.32855

5.24214

5.15787

5.07569

4.99553

4.91732

4.84101

4.76654

4.69385

4.62288

4.55359

4.48592

4.41983

4.35526

7

6.23028

6.11454

6.00205

5.89270

5.78637

5.68297

5.58238

5.48452

5.38929

5.29660

5.20637

5.11851

5.03295

4.94961

4.86842

8

7.01969

6.87396

6.73274

6.59589

6.46321

6.33457

6.20979

6.08875

5.97130

5.85730

5.74664

5.63918

5.53482

5.43344

5.33493

9

7.78611

7.60769

7.43533

7.26879

7.10782

6.95220

6.80169

6.65610

6.51523

6.37889

6.24689

6.11906

5.99525

5.87528

5.75902

10

8.53020

8.31661

8.11090

7.91272

7.72173

7.53763

7.36009

7.18883

7.02358

6.86408

6.71008

6.56135

6.41766

6.27880

6.14457

 

 

 

 

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