Patterson Company issued 30-year bonds on June 30. The face value of the bonds was $1,000,000. The

Question:

Patterson Company issued 30-year bonds on June 30. The face value of the bonds was $1,000,000. The stated interest rate on the bonds was 8%. The market rate of interest at the time of issuance was 6%. Patterson also issued another set of bonds on August 31. These bonds were 20-year bonds and had a face value of $750,000. The stated rate of interest on these bonds was 7%. The market rate of interest at the time these bonds were issued was 10%. Both sets of bonds pay interest semiannually.

Required:

Calculate the issuance price of these 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...