S14-4 Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest. and time. Requirements 1. Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 c. $100,000 issued at 94.50 b. $100,000 issued at 103.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity: Explain your answer.
Q: BE11.1 (LO 2) Meera Ltd. issued 4,000, 8%, 5-year, £1,000 bonds dated January 1, 2020, at 100.…
A: Bonds are the financial instrument that is issued by the corporates to gather the debt funds from…
Q: Question Information: REQ A Bond Face Stated Effective…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Problem 1 On July 1, 2014, Norren Company paid P1, 198, 000 for 10% bonds with a face amount of P1,…
A: As per Financial instrument standard IFRS 9, Thr carrying amount of bond investment on December…
Q: E14-11 (LO1) (Information Related to Various Bond Issues) Karen Austin Inc. has issued three types…
A: Bonds are one of the important financial instruments that a company or any private or public…
Q: Gordon Corporation issued $700,000 par value 2% 5 year bonds on Jan 1 2019. The bonds mature on…
A: Face value $700,000 Discount rate 4% Time to Maturity 5 years Number of periods 10…
Q: Evaluate the following statements: S1 The proceeds of a bond with a face amount of P100,000,000…
A: Proceeds of a bond with a face amount of P100,000,000 which sells at 102 = P100,000,000 X 102/100…
Q: A bond traded at 971⁄2 means that a. The bond pays 971⁄2% interest. b. The bond trades at $975 per…
A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…
Q: AL issues 7.9%, 20-year bonds with a face amount of $2,500,000 for $2,512,411. The market interest…
A: Introduction: A bond is a fixed-income device that represents a loan from an investor to a borrower…
Q: Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of…
A: Interest Expense. Face Value x Interest rate. Face value = $1000000 Interest rate = 4% Interest…
Q: TABLE 3.9 END-OF-YEAR PAYMENTS Bond A Bond B Bond C Bond D Year 1 100 50 0+1,000 Year 2 100 50 Year…
A: The present value factor or present value annuity factor is considered to compute the price of the…
Q: owv21 Online teachin X signment/takeAssignmentMain.do?invoker…
A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…
Q: Markway Inc. is contemplating selling bonds. The issue is to be composed of 750 bonds, each with a…
A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…
Q: On July 1. 2000. Car issued 9% bonds in the face amount of P1.000.000. which mature on July 1, 2010.…
A: Here in this question, we are required to calculate unamortized discount amount. When face value of…
Q: On 1 January 20X3, XYZ bought a $200,000 5% bond at nominal value. Interest is received in arrears.…
A: Bonds are amortized in the books of accounts by the difference between the interest expense and…
Q: 6. [HW] $100,000 bond redeemable at par on October 1, 2038, is purchased on January 15, 2017.…
A: Solution a.Calculation of Cash Price Equation Cash Price = Quoted Price + Accrued Interest (Since…
Q: A. В E F 1 On January 1, Ruiz Company issued bonds as follows: 2 Face Value: 3 Number of Years: 4…
A: The bond price of a bond is the current worth of a bond on the basis of the present value of all the…
Q: On July 1. 2000. Car issued 9% bonds in the face amount of P1.000.000. which mature on July 1, 2010.…
A: Given, Coupon rate = 9% Yield = 10% Maturity = 10 years Bond discount = P 61,000 Face Value = 1000…
Q: E10-11 Riot Company issued $500,000, 15-year, 7% bonds at 96. Instructions (a) Prepare the journal…
A: Amount received on issue of bonds = Face value of bonds x issue price/100 = $500,000 x 96/100 =…
Q: "P15.8A YLO 6) On January 1, 2020, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Assume bonds payable are amortized using the straight-line amortization method unless stated…
A:
Q: roblem 1: Perpetual Bonds ABC will be issuing a 4% P20,000,000-face value bonds. The underwriter…
A: Solution Cost of debt = interest *(1-tax rate )/ issue proceed Working note Issue proceed of…
Q: See attached picture Please answer d, e, and f
A: Available for sale securities are reported at fair value of the securities. In case of bonds…
Q: Effective Interest MethodE9B. On March 1, 2014, Munsey Corporation issued $1,200,000 of 6 percent,…
A: Bonds are debt instruments with a fixed interest coupon issued by corporations to finance its…
Q: Karson Company. issues 10-year bonds maturity, face value of $200,000 and16% interest rate. If the…
A: Bonds can be defined as a fixed income security which provides regular interest income to its…
Q: Annual Interest Payment: PV of Face Value: +PV of Interest Payments: =Bond Selling Price: $…
A: The bond is said to be issued at discount if the selling price if less than face value and at…
Q: 8. A bond issued with a par value of $200,000 and a carrying amount of $195,500 is retired at 98.5.…
A: The bonds are the financial instruments for the business used to raise the money from the market or…
Q: 18. Given the information below, which bond(s) will be issued at a discount? Bond 1 Bond 2 Bond 3…
A: 18) The bond is issued or trades at discount when, Coupon rate (stated rate of return)is less than…
Q: 32. Two bonds have par values of $1,000. Bond A is a 5% annual-pay, 10-year bond priced to yield 8%…
A: Using excel PV function to calculate the price of the bonds.
Q: Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of…
A: As per Bartleby guidelines,If a question with multiple sub-parts are posted, first 3 sub-parts will…
Q: Bond Premium and Discount Markway Inc. is contemplating selling bonds. The issue is to be composed…
A:
Q: 7) On January 1, 2016, Giant Company issued an 8% callable bond which has a par value of $200,000…
A: Retirement of Bonds: Retirement of bonds is the scenario where a company reacquires bonds which are…
Q: Determine the yield to maturity. b. What is the value of the bonds to you given the yield to…
A: Information Provided: Par value = $1000 Market price = $860 YTM on comparable bond = 13% Annual…
Q: ABC company issued a 5 year $200,000 bond. The bond has a stated rate of 6% and the market rate of…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: The Saleemi Corporation's $1,000 bonds pay 7 percent interest annually and have 13 years until…
A: Bonds are the financial instruments that represent a debt taken by a corporation from the investors…
Q: stion 1 A) Explain any four of the following types of bond issues: Secured bonds.…
A: Step 1 A bond is an instrument of the bond issuer's indebtedness to the bondholders.
Q: BBK 1000,7% 2 years were corporate bonds floated by Barclays bank of Kenya. The bonds were sold at a…
A: Here,
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 $100,000 issued at 94.50 b. $100,000 issued at 103 50 c. $100,000 issued at 94.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.Assume bonds payable are amortized using the straight-line amortization method unless stated otherwise. Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements Compute the price of the following 8% bonds of Country Telecom. $100,000 issued at 75.25 $100,000 issued at 94.50 $100,000 issued at 103 50 $100,000 issued at 94.50 $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer.4. What is the carrying value of the bonds at the end of the second period (third number)? Premium 57,913.01 Carrying value (bonds) 432,913.01 Face Rate Market Rate Semiannual payments a. b. Cash Payment C. d. e. 14% 10% 0 or 1 2 or 3 4 or 5 6 or 7 8 or 9 Interest Expense Today Period #1 26,250.00 Period #2 26,250.00 Carrying value at end of second period (third number) ___________?__ 2. Disc. or Prem. Amort. 21,645.65 21,415.43 Disc. or Prem. 4,604.35 4,834.57 57,913.01 53,308.66 48,474.10 Face Value 375,000.00 375,000.00 375,000.00 Carrying Value 432,913.01 428,308.66 423,474.10
- The Excel file Immunization Using Individual Bonds contains information about three bonds. Use this data to: Yield to maturity (Expected/Current) 7% Number of Years to Future Liability 8 Future Liability $ 3,000.00 Bond 1 Bond 2 Bond 3 Coupon rate 8.00% 9.000% 7.00% Maturity 9 24 15 Face value 1,000 1,000 1,000 Explain which bond you prefer to use to attempt to immunize this obligation which is due in 8 years. Analyze each bond’s performance in attempting to achieve immunization Please show work in excel and functions/equations used.Interest Expense Discount on Bonds Payable v Cash v Feedback V Check My Work The straight-line method of amortization provides equal amounts of amortization over the life of the bond. 3. Determine the total interest expense for 20Y1. Round to the nearest dollar. $ 4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest? Yes 5. Compute the price of $5,946,703 received for the bonds by using the present value tables in Appendix A. Round your PV values to 5 decimal places and the final answers to the nearest dollar. Your total may vary slightly from the price given due to rounding differences. Present value of the face amount $ Present value of the semiannual interest payments Price received for the bonds 2$ 00Bond prices depend on the market rate of interest, stated rate of interest, and time. Read the requirements. Requirement 1. Compute the price of the following 5% bonds of Country Telecom. a. The price of the $500,000 bond issued at 75.75 is Requirements 1. 2. Compute the price of the following 5% bonds of Country Telecom. a. $500,000 issued at 75.75 b. $500,000 issued at 103.50 c. $500,000 issued at 95.75 d. $500,000 issued at 102.50 Which bond will Country Telecom have to pay the most to retire at maturity? Explain your answer. Print Done - X
- Bond prices depend on the market rate of interest, stated rate and time Compute the price of the following 5% bonds of Teledyne Inc. a. $900,000 issued at 92 b. $500,000 issued at 104.5 c. $500,000 issued at 95.5 d. $200,000 issued at 100 e. $600,000 issued at 102 3/4What 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 $1,000Bond Premium and Discount Markway Inc. is contemplating selling bonds. The issue is to be composed of 750 bonds, each with a face amount of $800. 4. Calculate how much Markway is able to borrow if each bond is sold at 103% of par.$fill in the blank 23f1fdf81fe3f91_4 5. Assume that the bonds are sold for $625 each. Prepare the entry to recognize the sale of the 750 bonds. Cash fill in the blank 2552a6f29fa5030_2 fill in the blank 2552a6f29fa5030_3 Discount on Bonds Payable fill in the blank 2552a6f29fa5030_5 fill in the blank 2552a6f29fa5030_6 Bonds Payable fill in the blank 2552a6f29fa5030_8 fill in the blank 2552a6f29fa5030_9 Record issuance of bonds at discount 6. Assume that the bonds are sold for $900 each. Prepare the entry to recognize the sale of the 750 bonds. Cash fill in the blank 1d87ca07df94044_2 fill in the blank 1d87ca07df94044_3 Premium on Bonds Payable fill in the blank 1d87ca07df94044_5 fill in the blank…
- 13. An investor purchases bonds with a face value of $100,000. Payment for thebonds includes (a) a premium (b) accrued interest rate and (c) brokeragefees. How would each of these charges be recorded and what dispositionwould ultimately be made of each of these charges??Calculate the value of each bond and discuss whether it sells at par, discount, or premium. (Annual interest rate) O A. Bond Bond Value A B C O B. Bond A B C O C. Bond A B с O D. Bond A B C $1,149.39 Discount $1,000.00 Par $85.60 Premium Bond Value Sells at par/discount/premium Bond Value $1,149.39 Premium $1,000.00 Par $85.60 Discount Sells at par/discount/premium Bond Value Sells at par/discount/premium $1,149.39 Premium $1,000.00 Par $85.60 Premium Sells at par/discount/premium $1,049.39 Premium $1,100.00 Premium $85.60 Discount Bond Par value Coupon interest Years to rate maturity JA B IC $1000 14% $1000 18% $100 10% 120 16 18 Required return 12% 8% 13%1. Calculate the total annual interest, total cost, and current yield for the bonds. (Round the"Current yield" to the nearest tenth percent and other answers to the nearest whole dollar.)Bond Number of bonds purchased Selling price Total annual interest Total cost Current yieldMuni 5 22 6 81.375 $ $ %