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Question

Return to Blackboard ieso, Intermediate Accounting, 16e 1.11, SystemAnnouncements Grace CALCULATOR PRINTER VERSION BACK NEXT Exercise 6-13 Kingbird Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request the board of directors has decided to raise funds for the new plant by issuing $3,432,300 of 8% term corporate bonds on March 1, 2017, due on March 1, 2032, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2017. At the time of issuance, the market interest rate for similar financial instruments is 8%. As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458, 581.) Selling price of the bonds Click if you would like to Show Work for this question: Open Show Work Question Attempts: 0 of 3 used SAVE FOR LA SUBMIT ANSWER ess BIOL 100-Lab 1.docx

Explanation / Answer

Answer.

The selling price of the bonds is $ 3432,300

Explanation:

As the market rate of interest prevailing is same as that of rate offered by the corporation, therefore, the bonds will be issued at par value.

Therefore, $3432,300 par value of bonds will be issued at $3432,300 only.

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