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Calculate the issue price of the bonds

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Question - On January 1, 2020 Sandhill Co. issued five-year bonds with a face value of $620,000 and a stated interest rate of 16% payable semiannually on July 1 and January 1. The bonds were sold to yield 8%.

Present value table factors are: Present value of 1 for 5 periods at 8% 0.68058

Present value of 1 for 5 periods at 16% 0.47611

Present value of 1 for 10 periods at 4% 0.67556

Present value of 1 for 10 periods at 8% 0.46319

Present value of an ordinary annuity of 1 for 5 periods at 8% 3.99271

Present value of an ordinary annuity of 1 for 5 periods at 16% 3.27429

Present value of an ordinary annuity of 1 for 10 periods at 4% 8.11090

Present value of an ordinary annuity of 1 for 10 periods at 8% 6.71008

Calculate the issue price of the bonds.

Reference no: EM132515183

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