How do calculate the bond selling price

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Problem 1: Calculate the bond selling price for the three separate scenarios that follow.

a. 33M Corp. authorized and issued $340,000, 6%, 20-year bonds payable on January 1, 2020. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%.

b. 33M Corp. authorized and issued $850,000, 7%, 10-year bonds payable on January 1, 2020. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 6%.

c. 33M Corp. issued $255,000, 5%, 10-year bonds payable on March 31, 2020. The bonds were authorized on January 1, 2020. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, beginning January 1, 2021, and the market rate of interest on similar bonds is 6%.

Reference no: EM132672499

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