A company issued 9%, 10-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 8%.Interest is paid semiannually. At what price did the bonds sell?Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Use tables, Excel, or a financialcalculator.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)Price of bonds

The objective of this question is to find out the selling price of the bonds issued by the company.…

Answered: A company issued 9%, 10-year bonds with…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On 1 July 2022 Bombo Ltd issues $2 million in six-year bonds that pay interest every six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method. (PV tables are available at the end of this exam). Required Determine the issue price. Provide the journal entries at the dates below by showing relevant calculations in a table form. (i) 1 July 2022
On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. (EY of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. 3. What bonds payable amount will Clearwater report on its December 31 balance sheet? Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.…
A company issued 5%, 20-year bonds with a face amount of $80 million. The market yield for bonds of similar risk and maturity is 6%. Interest is paid semiannually. At what price did the bonds sell?
Determine the interest payment for the following three bonds. (Assume a $1,000 par value.) (Round your answers to 2 decimal places.) 1. 3 % percent coupon corporate bond (paid semiannually): 2. 4.25 percent coupon Treasury note (paid semiannually):
A 14. Subject:- finance
You are analyzing the cost of debt for a firm. You know that the firm's 14-year maturity, 8.6 percent coupon bonds are selling at a price of $832.00. The bonds pay interest semiannually. If these bonds are the only debt outstanding, answer the following questions. Problem 13.17 a1-a2(a1) Your answer is incorrect. What is the current YTM of the bonds? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to O decimal places, e.g. 15%.) Current YTM for the bonds %
Find the total proceeds (in $) from the sale of 30 bonds with a coupon rate of 8.75 and a current price of 96.575. (Round your answer to the nearest cent.) The commission charge is $6.00 per bond. The date of the transaction is 145 days since the last interest payment. $2821.53 x
Current Attempt in Progress × Your answer is incorrect. Marin Inc. issues $2,100,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest fo bonds of similar risk is 9%. Click here to view factor tables. What amount will Marin receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor tabl provided and final answer to O decimal places, e.g. 458,581.)
A company issued 9%, 15-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually. At what price did the bonds sell?
1. On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%.The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of thebonds? Explain why the cash received from selling this bond is different from the $200,000 face value of thebond
BlueLtd. Issued a $1,164,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Blue followed IFRS. Using 1 factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the tactor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITYOF 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275.) Proceeds from sale of bond : on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…
Sheridan Corp. has 18-year bonds outstanding. These bonds, which pay interest semiannually, have a coupon rate of 10.065 percent and a yield to maturity of 9.3 percent. Assume face value is $1,000. Problem 8.30(a) Your answer is incorrect. Compute the current price of these bonds. (Round answer to 2 decimal places, e.g. 15.25.) Current price $ eTextbook and Media Save for Later Attempts: unlimited Submit Answer

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