Cross Country Railroad Co. is about to issue $100,000 of 10-year bonds that pay a 5.5% annual interest rate, with interest payable semi-annually. The market interest rate is 5%. How much can Cross Country expect to receive for the sale of these bonds? To calculate, use (a) the
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- Hardevarrow_forwardLever Age pays an 9% rate of interest on $9.70 million of outstanding debt with face value $9.7 million. The firm's EBIT was $2.3 million. a. What is its times interest earned? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Times interest earned 0.03 X b. If depreciation is $170,000, what is its cash coverage ratio? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Cash coverage ratio 0.03 Xarrow_forwardVijayarrow_forward
- InterTech Corporation needed financing to build a new manufacturing plant. On June 30 of this year, InterTech issued $3,480,000 of 8-year bonds with a 6% coupon rate (payments due on December 31st and June 30th). The effective interest rate was 8%. What amount in interest expense did InterTech record this year for the December 31 payment? Select one: a. $139,200 b. $156,685 c. $92,235 d. None of these are correct. e. $122,980arrow_forwardExam Corp. is in need of cash. On 1/1/2023 Exam Corp. issues bonds with a $350,000 face value. The bonds have an 7.50% coupon rate. The market rate is 18%. The bonds have a life of 6 years, and are compounded semiannually. At the time of issuance, the price of the bonds is correctly calculated to be $218,420. All answers below can be rounded to the nearest dollar. What is the journal entry Exam Corp. will record on 6/30/23? Dr. Interest Revenue $19,658 Cr. Cash $13,125 Cr. Discount $6,533 Dr. Interest Expense $19,658 Cr. Discount $6,592 Cr. Cash $26,250 Dr. Interest Payable $19,658 Cr. Premium $6,592 Cr. Cash $26,250 Dr. Interest Expense $19,658 Cr. Cash $13,125 Cr. Premium $6,533 Dr. Interest Expense $19,658 Cr. Cash $13,125 Cr. Discount $6,533arrow_forwardPinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Determine the present value of the bonds payable. Round your answer to the nearest dollar.arrow_forward
- Supper Accountants Inc plans to sell a bond to finance its plant. The face value of the bond is $100,000 and it will be due in 5 years. The bond is offered at 6% annual interest rate, although the market rate is 7%. Supper Accountants is expected to receive $95,900 in cash when the sales is completed. How much interest expense should Supper Accountants record for the first year? 6,000 5,754 7,000 6.173arrow_forwardGive me correct answer with explanation.jarrow_forwardOn October 1, 2023, Dejour Energy Inc. issued a $697,000, 10.0%, seven-year bond. Interest is to be paid annually each October 1. Dejour Energy Inc. has a November 30 year - end. (Use TABLE 14A.1 and TABLE 14A.2.). Note: Use table values for PV calculations. (Use appropriate factor(s) from the tables provided.) Required: a. Calculate the issue price of the bond assuming a market interest rate of 12.0% on the date of the bond issue. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Part 1 Record the following entries: (Round your intermediate calculations and final answers to the nearest whole dollar.) Issuance of the bonds on October 1, 2023. Adjusting entry to accrue bond interest and discount amortization on November 30, 2023.…arrow_forward
- Please answer all questions and show all calculations. Thank you.arrow_forwardGoldtiger is issuing a CMO with 2 tranches:- Tranche A has $29 million in principal and a 3.9% coupon.- Tranche B has $20 million in principal and a 3.9% coupon. The mortgages backing the security issued are FRM at a mortgage rate of 3.9% with 10 year maturities and annual payments. There is no guarantee/servicer fee. Prepayment is assumed to be 5% CPR.In year 1, what is the cash flow to investors in Tranche B? Round your answer to two decimal points (e.g. if your answer is $50,999.4532, write 50999.45).arrow_forward
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