Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return. Market Rate of Return. Bond 1 5% 7% Bond 2 Bond 3 7% 12% 8% 12% Bond 4 10% 9%
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- Given the information below, which bond(s) will be issued at a discount? Bond 1 Bond 2 Bond 3 Bond 4 Stated Rate of Return 5% 9% 11% 10% Market Rate of Return 7% 7% 11% 13% Multiple Choice Bond 1. Bond 2. Bond 3. Bonds 1 and 4.Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Multiple Choice Bond 1 Bonds 2 and 4 Bond 2 Bond 4 Bond 11 Bond 2 8% 58 79 88 Bond 3 148 148 Bond 4 139 148Given the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2 Bond 3 Bond 4 Stated Rate of Return 5% 10 % 15% 12% Market Rate of Return 5% 8% 12% 14% Bond 1. Bond 2. Bond 4. Bonds 2 and 3.
- From page 9-3 of the VLN, when determining the issue price of a bond, which interest rate would you use? Group of answer choices A. Stated rate B. Market rate C. Nominal rate D. Compound rateANSWER AS MANY QUESTIONS POSSIBLE THIS IS A STUDY GUIDE Ch 11 Bonds and LTL1. When will bonds sell at a premium and discount? 2. Calculate bond interest under SL method.3. Impact of amortization of bond premium/discount on interest expense.4. Give an example journal entry for amortization of bond premium/discount.5. What is the Gain/loss on redemption of bonds? How do you calculate?6. Understand method of calculating PV of future cash flows -specifically for a bond.7. Why are bonds a popular source of financing?8. Contract rate (market rate) is used for what calculation purpose?Ch 10 SE: Corporations1. What are Rights possessed by common stockholders?2. What are a journal entries for stock issuance, cash dividend, stock dividend?3. What is the calculation of dividends when cumulative preferred stock is outstanding?4. Journal entries for treasury stock, financial statement presentation. Gain/loss on reissue of treasury stock.5. Prior period adjustment - example of, accounting for?6.…From page 9-2 of the VLN, how do you determine the annuity cash flow (the bond interest payment) from an annual bond? Group of answer choices A. Bond payable x stated rate B. Bond liability x stated rate C. Bond payable x market rate D. Bond liability x market rate
- What is assumed the be the face value aka par value aka principal aka loan amount of a bond? It's also assumed to be a bond's FV. 10% $0 $100 $1,000Use the worksheet to compute the bond issue price if the effective interest rate is 9%. Bond issue price _____6. Bonds that mature in installments are called term bonds. 7. A conversion feature may be added to bonds to make them more attractive to bond buyers. 8. The rate used to determine the amount of cash interest the borrower pays is called the stated rate. 9. Bond prices are usually quoted as a percentage of the face value of the bond. 10. The present value of a bond is the value at which it should sell in the marketplace. Instructions Identify each statement as true or false. If false, indicate how to correct the statement.
- From page 9-2 of the VLN, what is the first thing you want to identify when approaching a bond problem? Group of answer choices A. Annual bond or semiannual bond B. Whether the market rate is different from the stated rate. C. The cash flows provided by the bond. D. The company's debt to equity ratio.From page 9-2 of the VLN, which terms refer to the Face amount of the Bond? 1. Bond liability 2. Bond payable 3. Carrying value 4. Maturity value Group of answer choices A. 1 only B. 2 only C. 1, 2, and 4 D. 2 and 4 E. 1 and 3Select the correct answer to each of the following statements. A. Increase B. Decrease C. Remain Constant 1. The amount of interest expense will _______ each payment period for a bond issued at a discount. 2. When a bond is issued at a discount, the cash interest payment will _________ over the life of the bond. 3. When a bond is issued at a premium, the carrying value of the bond will _______ over the life of the bond.