Compute what is the book value of the bonds on june

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Cron Corporation is planning to issue bonds with a face value of $800,000 and a coupon rate of 13 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Cron uses the effective-interest amortization method. Assume an annual market rate of interest of 12 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Problem 1:
What amount of cash should be paid to investors June 30 and December 31 of this year?

Problem 2: What is the book value of the bonds on June 30 and December 31 of this year? (Round your final answers to nearest whole dollar amount.)

Reference no: EM132663224

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