On January 1, Corley, Inc., issues 10%, 5-year bonds with a face value of $150,000 when the

Question:

On January 1, Corley, Inc., issues 10%, 5-year bonds with a face value of $150,000 when the effective rate is 12%.

Interest is to be paid semiannually. Prepare calculations to prove that the selling price of the bonds is $138,959.90.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...