On January 1, 2017, Marigold Corp. issued eight-year bonds with a face value of
ID: 2543379 • Letter: O
Question
On January 1, 2017, Marigold Corp. issued eight-year bonds with a face value of $5920000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:
Present value of 1 for 8 periods at 10% 0.467
Present value of 1 for 8 periods at 12% 0.404
Present value of 1 for 16 periods at 5% 0.458
Present value of 1 for 16 periods at 6% 0.394
Present value of annuity for 8 periods at 10% 5.335
Present value of annuity for 8 periods at 12% 4.968
Present value of annuity for 16 periods at 5% 10.838
Present value of annuity for 16 periods at 6% 10.106
The present value of the principal is
Explanation / Answer
Calculate the present value of principal is :
Present value of principal = (5920000*.394) = 23,32,480