Question: please help explain step by step how you solve for issuance price. is there a formula? I took interest payments*PVA at 6% for 20 yrs

 please help explain step by step how you solve for issuanceprice. is there a formula? I took interest payments*PVA at 6% for20 yrs + face value*PV. why is that wrong? Required information [The

please help explain step by step how you solve for issuance price. is there a formula?

I took interest payments*PVA at 6% for 20 yrs + face value*PV. why is that wrong?

Required information [The following information applies to the questions displayed below.] On January 1 of this year, Cunningham Corporation issued bonds with a face value of $218,000 and a coupon rate of 6 percent. The bonds mature in 20 years and pay interest annually every December 31 . When the bonds were the annual market rate of interest was 8 percent. The company uses the effective-interest amortization method. By 31 of this year, the annual market rate of interest had increased to 10 percent. (FV of $1,PV of $1,FVA of $1, and PVA of $1 ) Note: Use appropriate factor(s) from the tables provided. Required: 1. What is the issuance price of the bonds on January 1 ? Note: Round your intermediate calculations and final answer to nearest whole dollar amount. Answer is complete but not entirely correct. Present Value of $1 Present Value of Annuity of $1

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!