Use the following information for questions.
On January 1, 2017, Satin Corp.issued eight-year, 6% bonds with a face value of $500,000, with interest payable semi-annually on June 30 and December 31.The bonds were sold to yield 8%.Table values are:
-The issue price of the bonds is
A)$441,780.
B)$442,410.
C)$444,780.
D)$499,800.

Question

Use the following information for questions.
On January 1, 2017, Satin Corp.issued eight-year, 6% bonds with a face value of $500,000, with interest payable semi-annually on June 30 and December 31.The bonds were sold to yield 8%.Table values are: 
-The issue price of the bonds is
A)$441,780. 
B)$442,410. 
C)$444,780. 
D)$499,800.

Quizplus · Accepted Answer

The issue price of the bonds is calculated by discounting the future cash flows (interest payments and principal repayment) to the present value using the market interest rate. The given choice A) $441,780 is the correct present value of these cash flows.

Use the Following Information for Questions