can you please provide the work value 3.70 points Spiller Corp. plans to issue 8

Question

can you please provide the work

value 3.70 points Spiller Corp. plans to issue 8%, 10-year, $500,000 par value bonds payable that pay interest semiannually on June 30 and December 31. The bonds are dated December 31, 2015, and are issued on that date. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "Table value" to 4 decimal places and final answers to nearest whole dollar.) If the market rate of interest for the bonds is 6% on the date of issue, what will be the total cash proceeds from the bond issue? Table Values are Based on: n- Cash Flow Present (maturity) value Interest (annuity) Total cash proceeds Amount Present Value Value

Explanation / Answer

Answer:

Since the interest payments are made semiannually, therefore,

Table value would be based on:

n = 20 (10 years *2)

i = 3% (6%/2)

Interest payments = Bond's par value * interest rate *no. of months in a period

= 500000*8%*6/12 = $20000

Cash flow Table value Amount Present value (table value* amount) Present (maturity value) 0.5537 (B.1) 500000 $ 276850 Interest (annuity) 14.8775 (B.4) 20000 $ 297550 Total cash proceeds $ 574400

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