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On january 1 2013 piper co issued ten-year bonds with a

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On January 1, 2013, Piper Co. issued ten-year bonds with a face value of $4,000,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:

  • Present value of 1 for 10 periods at 10% 386
  • Present value of 1 for 10 periods at 12% 322
  • Present value of 1 for 20 periods at 5% 377
  • Present value of 1 for 20 periods at 6%312
  • Present value of annuity for 10 periods at 10%6.145
  • Present value of annuity for 10 periods at 12%5.650
  • Present value of annuity for 20 periods at 5%12.462
  • Present value of annuity for 20 periods at 6%11.470

(a) Calculate the issue price of the bonds.

(b) Without prejudice to your solution in part (a), assume that the issue price was $3,536,000. Prepare the amortization table for 2013, assuming that amortization is recorded on interest payment dates.

Reference no: EM13584749

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