FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The question that says “a $4000, 6% bond is sold at 93. When the bond is issued, the cash account will be increased by:
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- Calculate the annual interest that you will receive on the described bond. A $500 Treasury bond with a current yield of 4.2% that is quoted at 107 points The annual interest is $ (Round to the nearest cent as needed.)arrow_forwardCalculate the purchase price of the $1,000 face value bond using the information given below. (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Issue date Maturity date Purchase date Coupon rate (%) Market rate (%) Dec 15, 1992 Dec 15, 2022 June 15, 2010 5.40 7.2 Assume that Bond interest is paid semiannually. The bond was originally issued at its face value. Bonds are redeemed at their face value at maturity. Market rates of return are compounded semiannually. Bond price $arrow_forwardFind 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 $6.00 per bond. The date of the transaction is 145 days since the last interest payment. 2$arrow_forward
- Use the following tables to calculate the present value of a $672,000, 6%, 6-year bond that pays $40,320 ($672,000 x 6%) interest annually, if the market rate of interest is 7%. Present Value of $1 at Compound Interest Periods 6% 7% 1 0.94340 0.93458 0.90909 2 0.89000 0.87344 0.82645 3 0.83962 0.81630 0.75131 4 0.79209 0.76290 0.68301 5 0.74726 0.71299 0.62092 6 0.70496 0.66634 0.56447 7 0.66506 0.62275 0.51316 8 0.62741 0.58201 0.46651 9 0.59190 0.54393 0.42410 0.55839 0.50835 0.38554 10 Present Value of Annuity of $1 at Compound Interest Periods 1 2 3 4 5 6 7 8 9 5% 10 0.95238 0.90703 0.86384 0.82270 0.78353 0.74622 0.71068 0.67684 0.64461 0.61391 5% 0.95238 1.85941 2.72325 3.54595 4.32948 5.07569 5.78637 6.46321 7.10782 7.72173 6% 0.94340 1.83339 2.67301 3.46511 4.21236 4.91732 5.58238 6.20979 6.80169 7.36009 7% 0.93458 1.80802 2.62432 10% 10% 3.38721 4.10020 4.76654 5.38929 5.97130 6.51523 5.75902 7.02358 6.14457 Round your intermediate calculations and final answer to the nearest…arrow_forwardA bond that matures in one year has a $500 face value and a $60 coupon. What is the price of the bond if the interest rate is 6 percent and the bond was purchased by the present owner for $450? $103.77 $481.13 $528.30 $500.00arrow_forwardCalculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%arrow_forward
- You wish to purchase some 25-year - maturity strip bonds with the $11,874 in cash you now have. If these strip bonds are currently priced to yield 2.125% compounded semiannually, how many $1000 denomination bonds can you purchase? a 5 bonds b 8 bonds c 6 bonds d 14 bonds e 7 bondsarrow_forwardAssume all bonds have par or face value of 1,000arrow_forwardYou purchased a $20,000 bond when there was 17 years to maturity. The bond has a coupon rate of 4.48 %. At the time of purchase the yield to maturity was 2.98%. How much did you pay for the bond? Enter your answer in blank #1. (Round) your answer to 2 decimal places and include the $ sign. Enter your answer in the form $1,234.56.) • Was the bond purchased at a premium or a discount? Enter "premium" or "discount" in blank #2. • What was the amount of premium or discount on the bond? Enter your answer in blank #3. (Round your answer to 2 decimal places and include the $ sign. Enter your answer in the form $1,234.56.) Blank #1 Blank #2 Blank # 3arrow_forward
- 3. The cash prices of 6-month and 1-year Treasury bills are 94.0 and 89.0. A 1.5-year bond that will pay coupons of $4 every 6 months currently sells for $94.84. A 2-year bond that will pay coupons of $5 every 6 months currently sells for $97.12. Calculate the 6-month, 1-year, 1.5-year, and 2-year zero rates.arrow_forwardMa1.arrow_forwardEf 420.arrow_forward
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