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Find the issue price of the bonds is

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Reference no: EM132498519

On January 1, 2020, Cotton Corp. issued eight-year, 3% bonds with a face value of $600,000, with interest payable semi-annually on June 30 and December 31. The bonds were sold to yield 4%.

Table values are:

Present value of 1 for 8 periods at 3%.789

Present value of 1 for 8 periods at 4%.731

Present value of 1 for 16 periods at 1.5%.788

Present value of 1 for 16 periods at 2%.728

Present value of annuity for 8 periods at 3% 7.020

Present value of annuity for 8 periods at 2% 7.325

Present value of annuity for 16 periods at 1.5% 14.131

Present value of annuity for 16 periods at 2%13.578

Question 1: The issue price of the bonds is

Option 1: $559,002.

Option 2: $599,979.

Option 3: $570,450.

Option 4: $599,760.

Reference no: EM132498519

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