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ACC- On January 1, 2008, Lowry Co. issued ten-year bonds with a face value

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Question;On January 1, 2008, Lowry Co. issued ten-year bonds with a face value of $1,000,000 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%.386Present value of 1 for 10 periods at 12%.322Present value of 1 for 20 periods at 5%.377Present value of 1 for 20 periods at 6%.312Present value of annuity for 10 periods at 10% 6.145Present value of annuity for 10 periods at 12% 5.650Present value of annuity for 20 periods at 5% 12.462Present value of annuity for 20 periods at 6% 11.470Instructions(a) Calculate the issue price of the bonds.(b) Without prejudice to your solution in part (a), assume that the issue price was $884,000. Prepare the amortization table for 2008, assuming that amortization is recorded on interest payment dates.

 

Paper#42394 | Written in 18-Jul-2015

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