Neukoelln Company issued six-year bonds on January 1. The face value of the bonds is $125,000. The

Question:

Neukoelln Company issued six-year bonds on January 1. The face value of the bonds is $125,000. The stated interest rate on the bonds is 10%. The market rate of interest at the time of issuance was 8%. The bonds pay interest semiannually. Calculate the issuance price of the bonds.

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...