Brief Exercise 9-64(Appendix 9A) Bond Issue Price

Objective 8(Appendix 9A) Calculate the market price of long-term debt using present value techniques.

On January 1, 2020, Ruby Inc. issued 3,000 $1,000 par value bonds with a stated rate of 6% and a 10-year maturity. Interest is payable semiannually on June 30 and December 31.

Required:

1. What is the issue price if the bonds are sold to yield 8%? (Note: Round to nearest dollar.)

Brief Exercise 9-65(Appendix 9A) Bond Issue Price

Objective 8(Appendix 9A) Calculate the market price of long-term debt using present value techniques.

On January 2, 2020, Nelson Construction issued 3,500 of $1,000 par value bonds with a stated rate of 8%, maturing in 10 years. Interest is payable semiannually on June 30 and December 31.

Required:

1. What is the issue price if the bonds are sold to yield 6%? (Note: Round to nearest dollar.)