Jimenez Enterprises issued 9%, 9-year, $2,554,800 par value bonds that pay inter

Question

Jimenez Enterprises issued 9%, 9-year, $2,554,800 par value bonds that pay interest semiannually on October 1 and April 1. The bonds are dated April 1, 2014, and are issued on that date. The discount rate of interest for such bonds on April 1, 2014, is 10%.

Click here to view the factor table.

(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What cash proceeds did Jimenez receive from issuance of the bonds? (Round answer to 0 decimal places, e.g. 125.)

Explanation / Answer

Answer: Cash proceeds from issuance of the bonds:

=$114966*PVIFA(5%,18)+$2554800*PVIF(5%,18)

=$1343906.5536+$1061519.4

=$2405426

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