Compute the proceeds from issuing the debentures

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On January 1, 20X0, Washington Park District issued $1000 of 5-year, 6% debentures. Interest is paid semiannually. The market interest rate at issuance was 10%.

Question 1. Compute the proceeds from issuing the debentures.

Question 2. For this bond transaction, show entries for the issuer concerning (a) issuance, (b) first semiannual interest payment, (c) second semiannual interest payment, and (d) payment of maturity value.

 

Present value of SI

Present value of S I annuity

n=5, i=10%

0.62092

3.79079

n=10,1=5%

0.61391

7.72173

n=5, 1=6%

0.74726

4.21236

n=10, i=3%

0.74409

8.53020

Reference no: EM132597024

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