Semi-annual interest: $100,000 x 8% x 6/12 = $4,000 Maturity of bonds Less: Price of the...

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Semi-annual interest: $100,000 x 8% x 6/12 = $4,000 Maturity of bonds Less: Price of the bonds PV of $100,000; 10 periods at 5%; interest is paid semi-annually; ($100,000 x 0.61391) PV of interest annuity; 10 periods at 5%; paid semi-annually; ($4,000 x 7.72173) $ 61,391 30,887 $100,000 92,278 $ 7,722 The 4% interest plus the bond discount of $7,722 will bring the effective interest rate to 5%. PiP 9.5 Facts 2023, Jan 2028 Jan Jan 1, 2023 Robinson Limited pays $92,278 to purchase Matunoy of bonds $100,000 of Chan's 8% bonds. Market rate of interest is 10%. =0.08 17 The bonds mature on Jan 1, 2028; interest is payable every July 1 and January 1. Sent commual Robinson accounts for this investment at amortized cost using the effective interest method. Robinson has an August 31 year end. Instructions: How was the price determined? Semi-annual interest: $100,000 x 8% x 6/12 = $4,000 Maturity of bonds Less: Price of the bonds PV of $100,000; 10 periods at 5%; interest is paid semi-annually; ($100,000 x 0.61391) PV of interest annuity; 10 periods at 5%; paid semi-annually; ($4,000 x 7.72173) $ 61,391 30,887 $100,000 92,278 $ 7,722 The 4% interest plus the bond discount of $7,722 will bring the effective interest rate to 5%. PiP 9.5 Facts 2023, Jan 2028 Jan Jan 1, 2023 Robinson Limited pays $92,278 to purchase Matunoy of bonds $100,000 of Chan's 8% bonds. Market rate of interest is 10%. =0.08 17 The bonds mature on Jan 1, 2028; interest is payable every July 1 and January 1. Sent commual Robinson accounts for this investment at amortized cost using the effective interest method. Robinson has an August 31 year end. Instructions: How was the price determined?