Question

When the market rate of interest was 12%, Halprin Corporation issued $651,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was? Use the present value tables in Exhibits and Exhibit:10 Os $650,997 Ob. $3.859.100 Oc $614.215 Od. $3.701,349

Answer 1

Option C = $614,215 is the correct answer

Bond issue price calculation

The bond issue price = present value of bond face value + present value of bond annual Interest payments

The present value factor should be 12% i.e. market rate

Annual interest = $651,000 × 11% = $71,610

Bond issue price = $651,000 × 12% annuity factor for 10 years + $71,610 × 12% Present value factor for 10 years

= ( $651,000 x 0.32197 ) + ($71,610 x 5.65022)

= $209,602.47 + $404,612.25

= $614,214.72

= $614,215  (round off)

Learn more about Issue Price: https://brainly.com/question/13990294

#SPJ4