intermediate accounting

ExcelPracticeforPVofBond.xlsx

Sheet1

Problem: On January 1, 2016, the Auto-Stop Corporation issued bonds in the amount of $10,000 that will be paid in three years. Interest of $400 is payable semiannually each January 1 and July 1 with the first interest payment at the end of the period, on July 1 of the current year. Draw a time line of the bond’s cash outflows. If the market rate of interest is 10%, what is the amount of the bond issue proceeds (cash received) when Auto-Stop Corporation issued the bonds?
Use PV formula in Excel (fx) to compute the PV of the cash outflows related to bond issuance:
	Fill in the formula in ?	Your answers should be
(1) PV of Single Sum	?	$ 7,462.15
(2) PV of Ordinary Annuity	?	$ 2,030.28
Total PV	?	$ 9,492.43
This should be equal to the amount of the bond issue proceeds (cash received)