Question

Ava, Inc., issued 7% bonds, dated January 1, with a face amount of $117,200 on January 1, 2016 for an issue price of 106.5. The bonds mature on December 31, 2025 (10 years). For bonds of similar risk and maturity the market yield is 9%. Interest is paid annually on December 31.
What is the interest payment on the bond?

10b) A company issued 5%, 20-year bonds with a face amount of $302,000. The market yield for bonds of similar risk and maturity is 5%. Interest is paid annually. What is the debit to cash for the bond proceeds?

Here are the PV and PVA factors

PV i=5%, 20 periods

PVA i=5%, 20 periods

PV i=7%, 20 periods

PVA i=7%, 20 periods

.37689

12.46221

.25842

10.59401

Answer 1

Complete Question

The complete question is shown on the first uploaded image

Answer:

10a The interest payment on the bond is = $ 8,204

10b The debit to cash for the bond proceeds is = $ 302,000

Explanation:

The explanation is shown on the second uploaded image