The numbers have been solved for but I want to know where did the bolded numbers
ID: 2528141 • Letter: T
Question
The numbers have been solved for but I want to know where did the bolded numbers come from in the Issue price of bonds? I have no idea what formula to use in excel to solve for the issue price of the bonds.
How do I find the discount on the bonds payable?
Balance Sheet (Partial)
Issue price of bonds = (2000000*2%*7.01969)+(2000000*0.78941) = 1859608
Balance sheet :
The company could issue $2,000,000 of long-term bonds, due in 4 years with a stated rate of interest, paid semiannually, of 4%. The market rate for similar debt is 6%. NFT Consulting and Sales Inc.How do I find the discount on the bonds payable?
Balance Sheet (Partial)
October 31,2018 Long Term Liabilities: Bonds Payable 2,000,000 Less: Discount on Bonds PayableExplanation / Answer
principal 2,000,000 interest (2000000*4%*1/2)= 40000 Where i= 3% (6%/2) t= 8 years (4*2) For principal use PV of $1 table at 3% for 8 years for interest use PV of ordinary annuity at 3% for 8 years principal 2,000,000 * 0.78941 = 1578820 interest 40,000 * 7.01969 = 280787.6 Bond issue price 1859608 answer