On January 1, 2025, Blossom Co. issued ten-year bonds with a face value of $6, 750,000 and a stated interest rate of 10%, payable semiannually on June 30 andDecember 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12 % 0.32197Present value of 1 for 20 periods at 5 % 0.37689 Present value of 1 for 20 periods at 6 % 0.31180 Present value of annuity for 10 periods at 10% 6.14457 Present value ofannuity for 10 periods at 12 % 5.65022 Present value of annuity for 20 periods at 5% 12.46221 Present value of annuity for 20 periods at 6 % 11.46992 1. Calculate theissue price of the bonds. 2. Prepare he amortization table for 2025, assuming that amortization is recorded on interest payment dates using the effective - interest method.

Par value of the bonds = $6,750,000Stated interest rate = 10%Years to maturity = 10 yearsYeild =…

Answered: On January 1, 2025, Blossom Co. issued…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

On January 1, 2024, Anne Teak Furniture issued $100,000 of 12% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. The annual market rate for bonds of similar risk and maturity is 14%. What was the issue price of the bonds? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Multiple Choice $89,460 $120,942 $95,460 $94,029
On January 1, 2024, Wildhorse Co. issued eight-year bonds with a face value of $6010000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10% 0.46651 Present value of 1 for 8 periods at 12% 0.40388 Present value of 1 for 16 periods at 5% 0.45811 Present value of 1 for 16 periods at 6% 0.39365 Present value of annuity for 8 periods at 10% Present value of annuity for 8 periods at 12% Present value of annuity for 16 periods at 5% Present value of annuity for 16 periods at 6% 5.33493 4.96764 10.83777 10.10590 The present value of the principal is O $2365837. O $2427319. O $2753241. O $2803725.
On January 1, 2025, Sandhill Co. issued ten-year bonds with a face value of $5,125,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are. Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12% 0.32197 Present value of 1 for 20 periods at 5% 0.37689 Present value of 1 for 20 periods at 656 0.31180 Present value of annuity for 10 periods at 10% Present value of annuity for 10 periods at 12% Present value of annuity for 20 periods at 536 Present value of annuity for 20 periods at 6% 6.14457 5.65022 1246221 11.46992 (a) Calculate the issue price of the bonds. (Round final answer to O decimal places, e.g. 25,000) Issue price of bond $ eTextbook and Media Save for Later (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
On January 1, 2024, Cullumber Co. issued eight-year bonds with a face value of $5920000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Table values are: Present value of 1 for 8 periods at 4% Present value of 1 for 8 periods at 6% Present value of 1 for 16 periods at 2% Present value of 1 for 16 periods at 3% Present value of annuity for 8 periods at 4% Present value of annuity for 8 periods at 6% Present value of annuity for 16 periods at 2% Present value of annuity for 16 periods at 3% The present value of the principal is O $4312424. O $4325685. O $3714267. O $3689166. 0.73069 0.62741 0.72845 0.62317 6.73274 6.20979 13.57771 12.56110
Sah
On April 1, 2016, Lerner Corporation issued $120,000 of five-year, 10% bonds at a market (effective) interestrate of 8%. Interest is payable semiannually on April 1 and October 1What is the amount of the semi-annual interest payment?Will the bonds be issued at a discount or premium?Present Value of the Semiannual Interest PaymentInterest RateNumber of PeriodsFactorPresent Value of the Interest PaymentsPresent Value of the Bond Face AmountInterest RateNumber of PeriodsFactorPresent Value of the FaceBonds ProceedsAmount of Discount or Premium
Waldron Corporation issued $900,000 of 16%, 10-year bonds payable on January 1, 2022. The market interest rate at the date of issuance was 14%, and the bonds pay interest semiannually (on June 30 and December 31). Waldron Corporation's year-end is June 30. Read the requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. (Round your answer to the nearest whole dollar) The issue price of the bonds is Requirements 1. Using the PV function in Excel, calculate the issue price of the bonds. 2. Prepare an effective-interest amortization table for the bonds through the first three interest payments, Round amounts to the nearest dollar. 3. Record Waldron Corporation's issuance of the bonds on January 1, 2022, and payment of the first semiannual interest amount and amortization of the bond premium on June 30, 2022 Explanations are not required Print Done
On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?
On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $210,000. The Cortland bonds have a stated interest rate of 10%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): January 1, 2021 11.0 % June 30, 2021 12.0 % Required:1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase.2. Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.3. Prepare all appropriate…
On January 1, 2021, Relay Company issued a 3-year, 12% bonds with face value of P3,000,000. Interest is payable annually every December 31 of each year starting December 31, 2021. The effective rate of interest on January 1, 2021 is 18%. PV of P1 @ 18% for 3 periods. 0.6086 PV of an ordinary annuity of P1@ 18% for 3 periods... 2.1743 How much is the interest expense for the year 2021? O P512,658 O P469,539 O P360,000 O P489,256
On June 30, 2024, Single Computers issued 5% stated rate bonds with a face amount of $280 million. The bonds mature on June 30, 2039 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024. 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.
On January 1, 2022, Broncos Universal issued 12% bonds dated January 1, 2022, with a face amount of $200 million. The bonds mature in10 years. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: Determine the price of the bonds at January 1, 2022. Prepare the journal entry to record the bond issuance on January 1, 2022. Prepare the journal entry to record interest on June 30, 2022, using the effective interest method. Prepare the journal entry to record interest on December 31, 2022, using the effective interest method.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS