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Work On Sheets! Part I (Problem-Solving) : Name: Date: Score
Work On Sheets! Part I (Problem-Solving) : Name: Date: Score
WORK ON SHEETS!
PART I (PROBLEM-SOLVING)
Determine the requirement for each of the following independent cases. Use a 10-column worksheet for the
solution. (8 items x 5 points)
Case 1: Eveready Company
Eveready Company issued P100,000 of 8% term bonds on January 1, 2X19, due on January 1, 2X24, with
interest payable on July 1 and January 1. The company’s investors are willing to accept the bond at an effective-
interest rate of 6%.
1. What is the present value of P100,000 bonds due in five (5) years at 6% interest payable semiannually?
2. What is the present value of P 4,000 interest payable?
3. What amount would the investors pay for that particular bond?
4. What is the premium/discount at the date of issuance?
5. Provide entry in the books of Eveready on January 1, 2X19.