Question: Question 7 options: Downing Corporationissues $5,000,000, 6%, 5-year bonds dated January 1, 2024 on January 1, 2024. The bonds pay interest semiannually on June 30

Question 7 options:

Downing Corporationissues $5,000,000, 6%, 5-year bonds dated January 1, 2024 on January 1, 2024. The bonds pay interest semiannually on June 30 and December 31. The market rate is 5%.

2.5% 3.0% 5.0% 6.0%
Present Value of a single sum for 5 periods .88385 .86261 .78353 .74726
Present value of a single sum for 10 periods .78120 .74409 .61391 .55398
Present value of an annuity for 5 periods 4.64583 4.57971 4.32948 4.21236
Present value of an annuity for 10 periods 8.75206 8.53020 7.72173 7.36009

Use the present value factors in the table above to calculate the proceeds from the bond issuance?

Are the bonds issued at par, a discount or a premium?

What is the amount of the discount or premium?

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