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On January 1, a company issues bonds dated January 1 with a par value of...

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Accounting

On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 3 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8%. 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 7.0 % 2.6243 0.8163
6 3.5 % 5.3286 0.8135
3 8.0 % 2.5771 0.7938
6 4.0 % 5.2421 0.7903

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