On july 1 2010 brower industries issues 8000000 of 5-year, Ask an Expert

Accounting

On July 1, 2010, Brower Industries issues $8,000,000 of 5-year, 11% bonds at an effective interest rate of 12% receiving $7,705,595. Interest on the bonds is payable semiannually on December 31 and June 30.

Q: Compute the price of $7,705,595 recieved for the bonds by using the tables of present value. Find the present value of the face amount and the present value of the semi-annual interest payments.

~The answer is: Present value of the face amount- $4,467,158 and the Present value of the semi-annual interest payments is $3,238,437
but I don't know how they solved this.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9952822

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