Granville Company issued a $6,300,000 in 8%, 10-year bonds when the market rate of interest is 10%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the issue price of Granville's the bond. (Round your final answer to nearest whole dollar.) Bond issue price
Q: You can calculate the yield curve, given inflation and maturity-related risks. Looking at the yield…
A: As per Q&A guidelines, The first question should be answered when multiple questions posted…
Q: a truck for 4 years at a cost of $43,000 annually. It can instead buy a truck at a cost of $93,000,…
A: Present value is the equivalent value today of the future cash flow based on time value of money.
Q: 1. Stock B has a beta of 1.2 and a return of 13.1%. Stock D has a beta of 0.8 and a return of 11.0%.…
A: The CAPM model will be used here. CAPM stands for Capital Asset Pricing Model. As per the CAPM model…
Q: Problem A-21 (Algo) Sensitivity Analysis in Capital Investment Decisions Green & Company is…
A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…
Q: Which of the following correctly orders the investment rules of average accounting return (AR),…
A: Capital budgeting is method of selecting projects among available projects so as to increase value…
Q: Miyagi Data, Inc., sells earnings forecasts for Japanese securities. Its credit tem 3/20, net 40.…
A: Credit Term of 3/20, Net 40 shows that buyers will get discount of 3% if payment is made in 20 days…
Q: what is the principal amount to be repaid at the end of ten years? Show your work.
A: Price of the bond is the PV of all future coupons and par value discounted at the YTM. By…
Q: Consider the following information about two stocks (D and E) and two common risk factors (1 and 2)…
A: Fama-French factor models are financial models used to explain and predict stock returns based on…
Q: What is the debt ratio for a firm with a debt-equity ratio of 0.5? Multiple Choice O 35% 33.3% 54%…
A: 1.Debt-Equity ratio is computed as follows:-Debt-Equity ratio = 2.Debt ratio = D = proportion of…
Q: The average growth rate needs to be 8.75 percent.
A: The rule of 70 determines the approximate time taken for an amount to double given the interest rate…
Q: Green & Company is considering investing in a robotics manufacturing line. Installation of the line…
A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…
Q: Assume Northeast Healthcare sold bonds that had a ten-year maturity, an 8 percent coupon rate with…
A: The price of the bond is equal to the present value of the coupon payments and the face value of the…
Q: You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal…
A: Since, the periodic payments are made at the end of each month, it is an ordinary annuity. The…
Q: Canine Crates just paid an annual dividend of $.45 per share but plans to double that amount each…
A: Current price of share is that price which can be paid for purchase of the share. It is also called…
Q: On Monday 6 March, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement…
A: Dirty price of bond is the sum of clean price of bond and accrued interest on the date of…
Q: Inc. has done the following projections for its balance sheet: total assets of $85 million, current…
A: Debt ratio shows how much is the total debt in total assets and this ratio remain fixed in new…
Q: Dave deposits $1500 at the end of every 6 months into his RRSP. He intends to make the deposits for…
A: The (FV) is a concept of time value which assists in representing an investment at a particular time…
Q: what is the standard deviation of Jordan's portfolio
A: The beta and standard deviation of riskfree rate is 0. Therefore the entire beta of the portfolio is…
Q: $millions Total Assets Net Income Sales Equity $241,225 $8,004 $535,845 $79,746 224,974 11,834…
A: Answers for a,b,c,d. Particulars20172018ROE13.82%9.68%ROA5.33%3.43%PM2.27%1.49%AT2.352.30Workings…
Q: What will be the WACC for this project? (Note: Round your intermediate calculations to three…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A church congregation has raised $37,625 for future outreach work. If the money is invested in a…
A: Future value = P x (1+i )n Where P= Principle Amount Invested i= Interest…
Q: The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 8…
A: The yield to maturity is the total return an investor has earned by holding the bond until its…
Q: Discuss how the subprime mortgage crisis of 2007 was based upon the flawed financial model that…
A: The subprime mortgage crisis of 2007 was a significant financial event that had far-reaching…
Q: 26) Your portfolio is comprised of the following stocks: $125.500 in stock Bross with a beta 2.8;…
A: The beta of a portfolio refers to the measure of the systematic risk that a portfolio faces and is…
Q: The debtor-creditor relationship is one where the customer instructs the bank to act on its behalf…
A: In a debtor-creditor relationship, one party (the debtor) owes a debt or obligation to another party…
Q: A student invests a principal of $3000 in a bank account which offers a return of 3% annual interest…
A: Future value refers to the worth of the invested money at some future date, It considers the effect…
Q: 3.You are given the option of receiving a lump sum of $20,000 now or an annuity of $2000 per year…
A: An annuity is a financial instrument that provides a series of equal payments made at equal…
Q: Present Value. Winners of the Georgia Lotto drawing are given the choice of receiving the winning…
A: Present value is an estimate of the present value of future cash values that may be received at a…
Q: Judy farm's year-end 2021 balance sheet lists current assets of $436,800, fixed assets of $551,200,…
A: The weighted average cost of capital is the weighted cost of all sources of capital. It is…
Q: 10. You are saving for retirement. To live comfortably, you decide you will need to save $1 million…
A: Annual deposit is calculated using following equationAnnual deposit = Where, FV is future value of…
Q: Compute the amount of interest on $8350 at 6.5% p.a. from October 8, 2019, to August 4, 2020.
A: As per Bartleby honor code, when multiple questions are asked, the expert is required only to solve…
Q: Northwestern Lumber Products currently has 16,500 shares of stock outstanding. Patricia, the…
A: Earnings available for equity shareholders = EBIT- interest expense.= $63,000-($129,000*6.4%)=…
Q: In recent years more than half of U.S. corporations did not pay a dividend nor did they repurchase…
A: Dividends refer to the money that the company gives out to its shareholders in the form of returns…
Q: Questions 11 to 12 The discount rate for the US T-bill that was issued on October 12, 2023 and…
A: First we need to determine the number of days from Oct 12,2023 to Jan 11,2024. This is 91 days. We…
Q: The price of NetFlex stock is $54.54; its expected dividend next year is $6, and its constant annual…
A: Required rate of return is that which is minimum rate of return which investor wants to earned on…
Q: A stock had returns of 14.43 percent, 18.87 percent, −14.99 percent, 12.39 percent, and 25.37…
A: Variance refers to the degree to which the return of a stock or asset vary over the time.
Q: serve three decimal places for non-terminating decimal values. Draw the cashflow diagram for each…
A: Money have time value and value of money increases with time due to time value of money.
Q: P10–24 ALL TECHNIQUES, CONFLICTING RANKINGS Nicholson Roofing Materials Inc. is considering two…
A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…
Q: What would be the net present value of a microwave oven that costs $234 and will save you $69 a year…
A: NPV=present value of cash flow-initial investmentCost of machine=$234Annual savings=$69Period =5…
Q: Assume that the Euro (EUR) futures price for September is USD 1.90. Given that 115,000 units are in…
A: The Euro futures price is USD 1.90, and there are 115,000 units in a Euro futures contract. To find…
Q: Based on the CAPM model, what should be the expected return for a stock with a beta of 2.1 when the…
A: The Capital Asset Pricing Model (CAPM) is used to calculate the expected return of a stock based on…
Q: (15. Samsung bond has been just issued under th e conditions: 10 years to maturity, coupon rate 7 %,…
A: Coupon bonds are debt securities that pay periodic interest payments, known as coupons, to the…
Q: Company A has 279,000 basic shares outstanding and 26,000 outstanding options and warrants. The…
A: Fully diluted shares include covertly preferred stocks, or stocks that can be claimed through…
Q: Required: a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's…
A: ROE=15%Plowback=40%EPS=$3Market capitalization=12%
Q: eBook A Treasury bond that matures in 10 years has a yield of 5.00%. A 10-year corporate bond has a…
A: Required rate of a bond depends on many factors like the type of bond risk involved in the bond and…
Q: obin's Barbeque has a bank loan at 8% interest and an after-tax cost of debt of 6%. What will the…
A: After tax cost of debt is calculated as follows:-After tax cost of debt =
Q: What are the main areas of finance
A: Finance is a broad field that encompasses various areas and disciplines. The main areas of finance…
Q: Financial institutions hold a portfolio comprising the following securities: 10 million bond with…
A: Total duration of portfolio can be calculated by multiplying the weight of securities with duration…
Q: Which one (1) of the following kinds of loss or damage is covered under the Condominium Unit Owners…
A: A Condominium Unit Owners Comprehensive Policy is an insurance policy bought by all units to protect…
Q: A large corporation has annual sales revenues of $6 billion. The corporation currently earns 2.25%…
A: Operating profit increases by 3 days sales which will be calculated by using equation below.Increase…
Step by step
Solved in 3 steps with 3 images
- Shopee Company was authorized to issue a 5-year, 10%, P5,000,000 bonds dated June 30, 2020. Interest is payable semi-annually on June 30 and December 31. (The company uses the effective interest method of amortization). Assuming the bonds were sold to yield: a.) at 8% b.) at 12% Required: a. Determine the issue price of the bonds. b. Prepare the amortization table for the entire life of the bonds c. Prepare the entries relating to the bonds for the year 2020 and 2021.Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 5%, which implies a selling price of 123.375. The straight-line method is used to allocate interest expense. 1. What are the issuer’s cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date?On January 1, Year 1, Kenneth Cole Inc. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30, and December 31 to yield 6%. The bonds were issued for $1,851,234. : Given the above information, Prepare the amortization schedule for Year 1 and Year 2 using the effective interest rate method. Use the following format and round figures to nearest dollar. Date Cash Paid Interest Exp Amortization Bond Carrying Value
- Enviro Company issues 8%, 10-year bonds with a par value of $200,000 and semiannual interest payments. On the Issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 12. The straight-line method is used to allocate interest expense. 1. What are the issuer's cash proceeds from Issuance of these bonds? 2. What total amount of bond Interest expense will be recognized over the life of these bonds? 3. What is the amount of bond Interest expense recorded on the first interest payment date? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Answer is complete but not entirely correct. Required 3 What total amount of bond interest expense will be recognized over the life of these bonds? Note: Round final answers to the nearest whole dollar amount. payments of Par value at maturity Total Bond Interest Expense Over Life of Bonds: Amount repaid: 20 $ 168,000 $ 3,360,000 200,000 3,560,000 Total repayments Less amount…On January 1, 2024, a company issues a $3, 500, 000, 10%, 5-year bonds that pays semiannual interest on July 1 and January 1. Assume the bonds were sold at: A. 92% B. 102% Instructions: For A and B journalize the issuance of the bonds. Journalize the first and second interest payment, using straight line amortization. Compute the bond's price (present value) assuming the following market interest: A. 12.5% B. 8.5%On January 1, Year 1, Kennard Co. issued $2,000,000, 5%, 10-year bonds, with interest payable on June 30 and December 31 to yield 6%. The bonds were issued for $1,851,234. a. Prepare an amortization schedule for Year 1 and Year 2 using the effective interest rate method. Round answers to the nearest dollar. Enter all amounts as positive numbers. Amortization Table The Effective Interest Rate Method Interest Paid Interest Expense Amortization Bond Carrying Amount Date 1/1/Year 1 6/30/Year 1 12/31/Year 1 6/30/Year 2 12/31/Year 2 b. Show how this bond would be reported on the balance sheet at December 31, Year 2. Kennard Co. Partial Balance Sheet
- Spiller Corporation plans to issue 6%, 6-year, $480,000 par value bonds payable that pay interest semiannually on June 30 and December 31. The bonds are dated January 1 of the current year and are issued on that date. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: 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 4% on the date of issue, what will be the total cash proceeds from the bond issue? Table Values are Based on: Cash Flow Present (maturity) value Interest (annuity) Total cash proceeds n= i= Table Value Amount Present ValueGarcia Company issues 10%, 15-year bonds with a par value of $240,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 1171⁄4. The effective interest method is used to allocate interest expense. 1. What are the issuer’s cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What amount of bond interest expense is recorded on the first interest payment date?On January 1, 2021, Daniel Corp. issued $500,000 of 10-year, 8% bonds for $385,298, yielding a market (discount, yield) rate of 12% per year. Interest is paid semi-annually on June 30 and December 31. Daniel uses the effective interest rate method to account for bonds. Required: a. Prepare JEs to record the issue on Jan. 1, 2021. Include the Discount on B/P b. What interest expense is reported on I/S for year ending December 31,2021? C. On December 31, 2029, after paying the December 31 interest (Coupon), Daniel Corp retires the bonds for $486,153. Determine the gain/loss on bonds retirement and prepare journal entries to record the retirement. Include the unamortized bond discount. d. Ignore (b) and suppose that on December 31, 2029, the yield decreases from 12% to 10% per year. What is the present value of the remaining cash flows of the bonds?
- On January 1, 2018, for $17.4 million, Cenotaph Company purchased 8% bonds, dated January 1, 2018, with a face amount of $19.4 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: 1. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2018, using the effective interest method. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 > Record the entry to interest on June 30, 2018, using the effective interest method. Note: Enter debits before credits. Date General…Spiller Corporation plans to issue 8%, 7-year, $480,000 par value bonds payable that pay interest semiannually on June 30 and December 31. The bonds are dated January 1 of the current year 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: Cash Flow Present (maturity) value Interest (annuity) Total cash proceeds n = i = Table Value 14 $ Amount 480,000 Present ValueLaura Hall Company issued $660,000 of 10%, 20-year bonds on January 1, 2025, at 102. Interest is payable semiannually on July 1 and January 1. Laura Hall Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Click here to view factor tables. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, eg. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) a. The issuance of the bonds. b. The payment of interest and related amortization on July 1, 2025. C The accrual of interest and the related amortization on December 31, 2025. Date Account Titles and Explanation Debit Credit