1) Create an amortization table for the Bond. 2) What is the Price of the bond? What is the Value of any discount or premium? 3) Provide all journal entries and T-accounts for this transaction over the next 3 years.
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Paul Dirac & Associates begin operations on 1/1/X1 by issuing a 3.00 year term (Bullet) bond with a par value of $2,600,000. The bond pays interest semi-anually. On the date of issuance, the annual coupon rate of the bond is 7.625% while the annual required
Questions
1) Create an amortization table for the Bond.
2) What is the Price of the bond? What is the Value of any discount or premium?
3) Provide all
4) Based on the information in the problem, create semi-annual pro-forma financial statements (I/S, SRE, B/S) for Dirac & Associates for the next 3 years (6 Semi-annual periods).
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- Paul Dirac & Associates begin operations on 1/1/X1 by issuing a 3.00 year term (Bullet) bond with a par value of $2,600,000. The bond pays interest semi-anually. On the date of issuance, the annual coupon rate of the bond is 7.625% while the annual required rate of return in the debt capital markets (the discount rate ) is 8.875%. Dirac assumes that he will earn $1,500,000 in cash revenues and incur cash operating expenses of 44.000% of revenues of each 6 month period for the next 3.00 fiscal years. The corporate tax rate is assumed to be 21.00% Questions 1) Create an amortization table for the Bond. 2) What is the Price of the bond? What is the Value of any discount or premium? 3) Provide all journal entries and T-accounts for this transaction over the next 3 years. 4) Based on the information in the problem, create semi-annual pro-forma financial statements (I/S, SRE, B/S) for Dirac & Associates for the next 3 years (6 Semi-annual periods).Paul Dirac & Associates begin operations on 1/1/X1 by issuing a 3.00 year term (Bullet) bond with a par value of $2,600,000. The bond pays interest semi-anually. On the date of issuance, the annual coupon rate of the bond is 7.625% while the annual required rate of return in the debt capital markets (the discount rate ) is 8.875%. Dirac assumes that he will earn $1,500,000 in cash revenues and incur cash operating expenses of 44.000% of revenues of each 6 month period for the next 3.00 fiscal years. The corporate tax rate is assumed to be 21.00% Questions Based on the information in the problem, create semi-annual pro-forma financial statements (I/S, SRE, B/S) for Dirac & Associates for the next 3 years (6 Semi-annual periods).The Sisyphean Company has a bond outstanding with a face value of $5,000 that reaches maturity in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 8.7% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 11.2%, then the price that this bond trades for will be closest to: A. $5,437 B. $4,531 C. $3,625 D. $6,344
- The sisyphean company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 year. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semi -annually. Required: assuming that this bond trades for $1,035.44, than the YTM for this bond is equal to:Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold to net $937.79. What is the YTM of the issue that a broker would quote to an investor?(Yield to maturity) Fitzgerald's 35-year bonds pay 8 percent interest annually on a $1,000 par value. If the bonds sell at $945, what is the bond's yield to maturity? What would be the yield to maturity if the bonds paid interest semiannually? Explain the difference. a. The bond's yield to maturity if the bond pays interest annually is %. (Round to three decimal places.)
- The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 5 years. The bond certificate indicates that the stated coupon rate for this bond is 8.7% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the Sisyphean bond is 7.3%, then this bond will trade atCompany I issues a $40,000,000 bond on January 1, 2020 with a coupon rate of 7%. The present value of the bond is $37,282,062 and the market rate of interest was 8%. The bond has a 10-year life and will make semiannual interest payments and will use the straight line amortization method. A) Is the bond issued at a face value, a discount, or premium? B) What is the amount of the semi-annual interest payments? C) What is the amount that will be recorded to interest expense each time an interest payment is made? D) What is the carrying value of the bond on December 31, 2021?Denzel Corporation is planning to issue bonds with a face value of $600,000 and a coupon rate of 7.5 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Denzel uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent (FV of $1. PV of $1. FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. and 2. Prepare the journal entries to record the issuance of the bonds and interest payment on June 30 of this year. 3. What bonds payable amount will Denzel report on its June 30 balance sheet? Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 1. and 2. Prepare the journal entries to record the issuance of the bonds and interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal…
- Serotta Corporation is planning to issue bonds with a face value of $460,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 4 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) 1. Provide the journal entry to record the issuance of the bonds January 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.) View transaction list Journal entry worksheet 1 > Record the issuance of the bonds on January 1. Note: Enter debits before credits. Date General Jounral Debit Credit January 01San Miguel Company's 18-year, $1,000 par value bonds pay 6.5 percent interest annually. The market price of the bond is $1,105, and your required rate of return is 8.5 percent. a. Compute the bond's expected rate of return. b. Determine the value of the bond to you given your required rate or return. c. Should you purchase the bond? Why or why not? (*You must show your calculation process as well.)Tony's Pizzeria plans to issue bonds with a par value of $1,000 and 10 years to maturity. These bonds will pay $45 interest every 6 months. Current market conditions are such that the bonds will be sold to net $937.79. What is the YTM of the issue that a broker would quote to an investor?(answer to the nearest whole number).