On January 2, year 1, Parker Co. issued 6% bonds with a face value of $400,000 when the market interest rate was 8%. The bonds are due in ten years, and interest is payable every June 30 and December 31. Parker does not elect the fair value option for reporting its financial liabilities. Use the following present value and present value annuity tables to calculate the selling price of the bond on January 2, year 1. Round your final answer to the nearest dollar.
Present Value Ordinary Annuity of $1
Periods 3% 4% 6% 8% 12% 16%
5 periods 4.5797 4.4518 4.2124 3.9927 3.6048 3.2743
10 periods 8.5302 8.1109 7.3601 6.7101 5.6502 4.8337
20 periods 14.8775 13.5903 11.4699 9.8181 7.4694 5.9288
Present Value of $1
Periods 3% 4% 6% 8% 12% 16%
5 periods .8626 .8219 .7473 .6806 .5674 .4761
10 periods .7441 .6756 .5584 .4632 .3220 .2267
20 periods .5537 .4564 .3118 .2145 .1037 .0514
Required:
Prepare the amortization schedule for the bond through December 31, year 1. Round all numbers to the nearest dollar.
Answers: 3
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On January 2, year 1, Parker Co. issued 6% bonds with a face value of $400,000 when the market inter...
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