Business, 30.11.2021 23:20 juliannxkim
PowerTap Utilities is planning to issue bonds with a face value of $2,700,000 and a coupon rate of 8 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 10 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
Required:
1. What was the issue price on January 1 of this year? (Round your final answer to whole dollars.)
2. What amount of interest expense should be recorded on June 30 and December 31 of this year? (Round your final answers to nearest whole dollar amount.)
3. What amount of cash should be paid to investors June 30 and December 31 of this year?
Answers: 1
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PowerTap Utilities is planning to issue bonds with a face value of $2,700,000 and a coupon rate of 8...
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Mathematics, 10.03.2020 00:49
