Chapter 8
Non-Current Liabilities
389
Application Questions Group A
Note: Round all calculations and final answers to the whole dollar. When needed, use the present
value factors provided in the textbook.
AP-1A (
2
4
)
On January 1, 2016, MT Biotech issued $3,500,000, 5% callable bonds due in 12 years. At the
time of issue, the market interest rate is 6% (interest is due annually). Calculate the discount or
premium at which the bonds were issued.
