value: 10.00 points Trew Company plans to issue bonds with a face value of $903,

Question

value: 10.00 points Trew Company plans to issue bonds with a face value of $903,500 and a coupon rate of 6 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to nearest whole dollar amount.) Determine the issuance price of the bonds assuming an annual market rate of interest of 8.0 percent ssuance price References eBook & Resources Worksheet Difficulty: 1 Easy Learning Objective: 10-04 Report bonds payable and interest expense for bond securities issued at a discount.

Explanation / Answer

Amount PV factor Present value Semi-annual interest 27105 13.59033 368366 Principal 903500 0.45639 412348 Issuance price 780714 Note: Final answer might vary + 1 due to rounding off of PV factor

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