Bonds with a face value-present value of the principal

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Reference no: EM13789125

On January 1, 2010, Ellison Co. issued 8-year bonds with a face value of $1,000,000 and a stated interest rate of 6%, payable semi annually on June 30 and December 31. The bonds were sold to yield 8%. Table values are as follows:

Present value of one for eight periods at 6%                             .627

Present value of one for eight periods at 8%                             .540

Present value of one for 16 periods at 3%                                 .623

Present value of one for 16 periods at 4%                                 .534

Present value of annuity for eight periods at 6%                        6.210

Present value of annuity for eight periods at 8%                        5.747

Present value of annuity for 16 periods at 3%                           12.561

Present value of annuity for 16 periods at 4%                           11.652

The present value of the principal is

$534,000.

$540,000.

$623,000.

$627,000.

Reference no: EM13789125

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