Prepare the relevant entries for the whole tenure.
Q: The Omani Company has two bond issues outstanding. Both bonds pay OMR (1000) annual interest plus…
A: BOND L Coupon Amount =1000 Face value =10000 MAturity =20 years BOND S Coupon Amount =1000 Face…
Q: Calculate the cost of capital of the bond!
A: Cost of capital refers to cost of raising and using money Formula I(1-t) + (fv-np)n---------------.…
Q: Cullumber Railroad Co. is about to issue $296,000 of 6-year bonds paying an 11% interest rate, with…
A: The amount that will be received from the sale of these bonds will be equal to the present value of…
Q: C. XY Ltd has bonds outstanding with 7 years left before maturity. The bonds are currently selling…
A: Yield to maturity refers to the internal rate of return which is earned by the investor who makes…
Q: is information regarding the capital structure of Micro Advantage Inc. On the basis of this…
A: The weighted average cost of capital (WACC) is a measure of a company's total cost of capital,…
Q: 23. How much is the value of Bond Marble?
A: Bond: It is a debt instrument issued by the firm for raising capital from debt investors. The…
Q: On January 1, 2010, Rambutan Corporation purchased debt securities for cash of P765,540. The…
A: Rambutan Corporation purchased debt securities at P765,540 which carries the interest rate of 10%…
Q: Compare the required credit risk capital under Basel I and Basel Il for the following set of…
A: Credit risk capital requirement is a part of total capital of the bank. It is also known as the risk…
Q: ABC Company will issue $5,600,000 in 8%, 10-year bonds when the market rate of interest is 10%.…
A: One of the source of raising the funds by the business entities is issue of debt securities i.e.…
Q: On 1 July 20X5 XYZ Ltd purchased a debenture with the following conditions: Face value on redemption…
A: Given information: Face value : $3,612,086 Maturity period : 5 years Coupon rate : 4% Effective…
Q: Juju Corporation buy Bilu bonds for 20 years and has been issued 12 years ago at a coupon rate of…
A: Hi, note the data for part b is incomplete. No infomration on the maturity term of Cucu bond is…
Q: Quail Company had an investment in bonds purchased at par for P8,000,000. On December 31, 2018, the…
A: Bondholders: Bond holders are the investors who acquires various bond of a company and after lapse…
Q: On 1 July 2018 Bombo Ltd issues $2 million in six-year debentures that pay interest each six months…
A: It is assumed that the journal entry is to be prepared on 1 July 2018 in part (ii). Given…
Q: On 1st July 2002, Midget Ltd. acquired some corporate bonds issued by Farrelly Ltd. These bonds cast…
A: The bonds which pay an interest rate higher than the market interest rate, usually sell at a…
Q: dgar Ltd issues $7 million in 6-year, 10%, semi-annual coupon debentures. The rate of return…
A: Amortization: A process which involves writing down or reducing the value of intangible assets or…
Q: ABC Corporation plans to issue an 8%, 15-year, P5,000,000 face value bonds. It will incur P300,000…
A: Here, we are required to calculate the cost of the bond by the yield to maturity formula and the…
Q: Can you help me to calculate adjusted net income, adjusted net income if FV of security B were…
A: FVOCI is the abbreviation of Fair Value through Other Comprehensive Income, when adjustments are…
Q: What amount of additional debt can be issued for each of the conditions (a), (b), and (c)?
A: The correct answer to the question should be none of the above. Current debt 5 million Interest…
Q: SMC will be issuing bonds with a face value of P100,000 through an underwriter. The underwriter will…
A: Expenses on Issue: Underwriting Commission = P100,000*7% = P7,000 Interest Expense = 8% =…
Q: Juju Corporation buy Bilu bonds for 20 years and has been issued 12 years ago at a coupon rate of…
A: Hi, Thanks for the Question. Since you asked multiple sub parts question, we will provide the…
Q: On 1 July 2022 Bombo Ltd issues $2 million in six-year bonds that pay interest every six months at a…
A:
Q: Telecom Systems can issue debt yielding 7 percent. The company is in a 30 percent bracket. What is…
A: Given Information: Cost of debt - 7% Tax rate - 30%
Q: What is the initial cost of the debt investment? 2. What is the carrying amount of the debt…
A: Initial cost of the debt investment is the cost which has been paid by the company (which is OP…
Q: ABC Co. is contemplating on investing on 12%, 3-year p1,000,000 bonds. Pricipal is due at maturity…
A: Introduction: Bonds are debt securities issued by a company to raise capital. The major difference…
Q: JUST Corporation provided the following information: 1) 9% 30million bonds outstanding with 100 par…
A: Initial Cash outlay of replacing old bonds with new bonds, will be the cost of new bonds, increased…
Q: A company issued a 10-year Rp500 million bond that pays annual coupon 10% and records the bond…
A: Present Value of Bonds=Book Value of Bonds×PVIF+Annual Interest×PVAF
Q: Sycamore, Inc. purchased €100,000 of 8 percent bonds of Alvarado Industries on January 1, 2022, at a…
A: When you own an asset that has deteriorated in value but do not sell it to realize the loss, you…
Q: Plastico, a manufacturer of consumer plastic products, is evaluating its capital structure. The…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: Blair Ltd. owns 100 bonds that can be converted into shares of Mac Ltd. with par value CU500 each…
A: Held-to-maturity securities are held for the purpose of keeping the investment till the maturity…
Q: The following information pertaining to a 5-year P4,000,000 debt investment with a stated rate of…
A: As per IFRS 9, the Financial instrument, the financial asset designated at fair value through OCI is…
Q: Show the double entry for each year to maturity of the bond. (Ignore loss allowances)
A: Carrying cost of loan receivable Year Beginning balance (a) Interest income (b)=(a) *…
Q: The following information is available about Green Valley Ltd’s newly issued securities and…
A: Value of a bond is the sum of present value of all its future cash flows. Future cash flows of a…
Q: Ying Import has several bond issues outstanding, each making semiannual interest payments. The bonds…
A: Here, To Find: After-tax cost of the company's debt =?
Q: Michalleti Marketing Consulting Ltd issued Gh¢500million of zero-coupon bonds with ex-interest of…
A: The cost of debt is the amount of the cost which is required by the company to pay to the lenders of…
Q: Alberta Capital Finance Authority issued a 20-year $100,000 bond on December 15, 2005, with a coupon…
A: Price of bond is the present value of coupon payment and present value of par value of bond on the…
Q: c. CIMB Islamic Bank Bhd had purchased Negotiable Islamic Debt Certificate (NIDC) with a nominal…
A: Note: This post has two distinct questions. The first has been answered below
Q: a. What is the debt/equity ratio for this firm in book value terms? In market value terms? b. What…
A: Cost of debt (yield to maturity) refers to the total return generated by a bond until it matures.…
Q: The following terms relate to independent bond issues: 460 bonds; $1,000 face value; 8% stated…
A: As posted multiple independent questions we are answering only first question kindly repost the…
Q: Company owner contributes 100,000, which is invested in a twenty-year bond with a 5% coupon paid…
A: Accounting treatment for the different types of investments: Investment held for trading will be…
Q: The following terms relate to independent bond issues: a. 610 bonds; $1,000 face value; 8% stated…
A: a). 610 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments:- Particulars…
Q: Crane Company is about to issue $390,000 of 6-year bonds paying an 12% interest rate, with interest…
A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…
Q: Acme company must pay liabilities of 3000 and 4500 at the end of years 1 and 2, respectively. The…
A: Given: Year 1 payment = $3,000 Year 2 payment = $4,500 Rate = 8%
Q: Fuzzy Monkey Technologies, Inc., purchased as a short-term investment $70 million of 6% bonds, dated…
A: Step 1: Journal entries:
MK Limited has invested in a debt instrument, details of which are as follows:
Face Value=10,000
Premium paid on the investment of the instrument =800
Transaction cost paid on the investment of the instrument =200
Coupon rate of the Instrument =12%
Term of the instrument = 4 years
MK Limited has a policy to classify Investment in debt instruments at Amortized Cost.
IRR of the debt Instrument is 8.9188%
Required Prepare the relevant entries for the whole tenure.
Step by step
Solved in 2 steps with 1 images
- You have been appointed as a financial consultant by the directors of Cochin Holdings. They require you to calculate the cost of capital of the company. The following information is available on the financing of the company: · R10 000 000, financial lease due in 5 years and the current yield-to-maturity is 10%. Prepare a loan amortization scheduleqA Ltd issued a 5% loan note on 1 April 2012 at its face value of K25 million. Direct costs of the issue were K1,500,000. the loan note will be redeemed on 31 March 2015 at a substantial premium. The effective interest rate applicable is 10% per annum. Explain the accounting treatment of the above instrumenta. Abc Investment Ltd., plans to borrow Ghc100,000 for a 90-day period from Lloyds Finance Company. Abc investment would repay the principal amount plus Ghc5,000 interest at maturity. Determine and calculate the Annual Percentage Rate of the credit to Abc Company Ltd. b. Belinda Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The company’s current assets consist of inventory and trade receivables. Current liabilities consist of accounts payables and an overdraft facility with an average interest rate of 10% per annum. The company gives 60 days credit to its customers and is allowed an average of 30 days credit by trade suppliers. The company has an operating cycle of 90 days. Other relevant information: Current ratio of Ait Ltd 1.5:1 Cost of long-term finance to Ait Ltd is 12% per annum Required: Calculate the, (i) Size of the overdraft of Ait Ltd (ii) Net working capital of the company (iii) Total cost of financing its current assets c.…
- A Collateralized Mortgage Obligation (CMO) principal balance is $1,000,000,000. The pass-thru rate is 5.35%. The Weighted Average Coupon rate is 6.35%. The weighted Average Months is 350. The PSA is 90. The CMO (at the time the CMO is first created) is divided into 4 tranches (A, B,C, D), each with a par value of $250,000,000 and a 5.35% coupon rate. Within how many months from the creation of the CMO will tranche C principal be totally paid? 30 55 207 350A) You invest OMR 900 in a bond which gives 9% interest over a period of 2 years, the compounding is done quarterly. How much will be the value of the investment? Select one: a. 1053.24 b. 1254.74 c. 1075.34 d. 753.24 B) Which of the statements are not correct Select one: a. Profits refers to earnings before Interest and Taxes b. Investment decisions relate to pattern of financing c. Dividend pay out ratio refers to what proportion is paid to shareholders d. Borrowed funds are relatively cheaper than shareholders’ fundsThe debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated Debt Principal Debt Payment $16,000 $1195 Payment Interval 6 months Interest Rate 4% Conversion Period semi-annually Outstanding Principal After: 6th payment (a) The number of payments required to amortize the debt is (Round the final answer up to the nearest whole number. Round all intermediate values to six decimal places as needed.) (b) The outstanding principal is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
- A Collateralized Mortgage Obligation (CMO) principal balance is $1,000,000,000. The pass thru rate is 5.35%. The Weighted Average Coupon rate is 6.35%. The weighted Average Months is 350. The PSA is 90. The CMO (at the time the CMO is first created) is divided into 4 tranches (A,B,C,D), each with a par value of $250,000,000 and 5.35% coupon rate. Within how many months from the creation of the CMO will tranche C principal be totally paid?The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt, (b) the outstanding principal at the time indicated. Outstanding Principal After: 6th payment Conversion Payment Interval Interest Rate Period Debt PrincipalDebt Payment $14.000 $893 3 months 9% quarterly (a) The number of payments required to amortize the debt is (Round the final answer up to the nearest whole number. Round all intermediate values to six decimal places as needed.) (b) The outstanding principal is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)The entity has an unsecured overdraft of R20000 at prospect Bank that carries an interest rate of 22% per annum. In which one of the following statement will this item be shown? A.Statement of financial position as a current liability B.Statement of financial position as a non current liability C.Statement of income and expenditure as finance costs C.Statement of financial position as current asset
- On 01/09/20x1 the company received an interest-bearing loan of 12000 euros for a period of 8 months. The interest rate was agreed at 8% per annum and the total interest will be paid at the end of the loan together with the capital.The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Debt Principal Debt Payment Payment Interest Rate Interval Conversion Period Outstanding Principal After: $14,000 $832 3 months 12% monthly 7th payment (a) The number of payments required to amortize the debt is 24 I (Round up to the nearest integer.) (b) The outstanding principal is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Payment Interval Conversion Debt PrincipalDebt Payment $14,000 Outstanding Principal After: 7th payment Interest Rate Period $875 1 month 12% monthly (a) The number of payments required to amortize the debt is. (Round the final answer up to the nearest whole number. Round all intermediate values to six decimal places as needed.) (b) The outstanding principal is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
