HMK Enterprises would like to raise $10.0 million to invest in capital expenditures. The company plans to issue​ five-year bonds with a face value of $1,000 and a coupon rate of 6.59% ​(annual payments). The following table summarizes the yield to maturity for​ five-year (annual-payment) coupon corporate bonds of various​ ratings:   Rating AAA AA A BBB BB YTM 6.19​% 6.36​% 6.59​% 6.96​% 7.54​%   a. Assuming the bonds will be rated​ AA, what will be the price of the​ bonds? b. How much of the total principal amount of these bonds must HMK issue to raise $10.0 million​ today, assuming the bonds are AA​ rated? (Because HMK cannot issue a fraction of a​ bond, assume that all fractions are rounded to the nearest whole​ number.) c. What must be the rating of the bonds for them to sell at​ par? d. Suppose that when the bonds are​ issued, the price of each bond is $961.60. What is the likely rating of the​ bonds? Are they junk​ bonds?

Gadget Co invests in a $100,000 bond with an 8% coupon rate. The market rate of interest is 10% annually and it is a 5 year bond 1. Assuming the company invests on January 1st and only pays $92,418 for this bond, what is the journal entry on January 1st? 2. Prepare a full amortization table for this bond: Purchase Year 1 Year 2 Year 3 Year 4 Year 5 Cash Received Interest Revenue Amortized Value Carrying Value stess Questions 3 and 4 on the next tab +

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…

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