Calculate the bond selling price for the three separate scenarios that follow. a. 33M Corp. authorized and issued $260,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%. b. 33M Corp. authorized and issued $650,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 6%. c. 33M Corp. issued $195,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate of interest on similar bonds is 6%.

Calculate the bond selling price for the three separate scenarios that follow. a. 33M Corp. authorized and issued $260,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 8%. b. 33M Corp. authorized and issued $650,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate of interest on similar bonds is 6%. c. 33M Corp. issued $195,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate of interest on similar bonds is 6%.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.3E: Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8%...

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Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.
Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
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 the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
Determining Bond Selling Price Calculate the bond selling price for the following three separate scenarios. a. 33M Corp. authorized and issued $100,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate on similar bonds is 8%. b. 33M Corp. authorized and issued $250,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate on similar bonds is 6%. c. 33M Corp. issued $75,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate on similar bonds is 6%. Note: Round answers to the nearest whole dollar. a. $ 80,207 b. $ 268,597 C. $ 69,479 *
On January of the current year, Banek Inc issued $350,000 of 8% nine year bonds for $309,086, which implies a market (yield) rate of 10%. Semiannual interest is payable on June 30 and December 31 each year. Show computation to confirm the bond issue price Indicate the financial statement effects using the template for (1) bond issuance, (2) semiannually interest payment and discount amortization on June 30 of the current year, and (3) semiannual interest payment and discount amortization on December 31 of the current year.
Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Determining bond prices Bond prices depend on the market rate of interest, stated rate of interest, and time. Determine whether the following bonds payable will be issued at face value, at a premium, or at a discount: The market interest rate is 8%. Idaho issues bonds payable with a stated rate of 7.75%. Austin issued 9% bonds payable when the market interest rate was 8.25%. Cleveland’s Cars issued 10% bonds when the market interest rate was 10%. Atlanta’s Tourism issued bonds payable that pay the stated interest rate of 8.5%. At issuance, the market interest rate was 10.25%.
Based on Question No. 1, I want answer of Question No. 2 On September 1, Deutsch Limited issues 8%, 5-year bonds payable with a maturity value of OR 20,000. The bonds sell at 98 and pay interest on March 1 and September Deutsch amortize bond discount by the straight-line method. Required: Journalize the issuance of the bonds on September 1, and the semiannual interest payment on March 1 and September 1. Answer: Bonds: Bonds are a kind of interest-bearing notes payable, usually issued by companies, universities, and governmental organizations. It is a debt instrument used for the purpose of raising a fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If the selling price of the bond is lesser than the face value, it is known as a discount on bond. If the selling price of the bond is greater than the face value, it is known as premium on bond. 2. What are the two categories of liabilities…
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 2a. Journalize the entry to record the first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the straight-line method.Compute the price of $42,601,480 received for the bonds by using the present value tables