FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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What is the difference between face rate and market rate, and which rate would be higher if a bond is issued at a discount?
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- What is a clean and dirty price of a bond?arrow_forwardIs having a call feature advantageous for a bond issuer? If so, why or why not?arrow_forwardHow does collateral affect the interest rate on a bond? How does subordination affect the interest rate on a bond too? What else might affect the interest rate on a bond?arrow_forward
- what happens to the bond prices when interest rate falls?arrow_forwardWhat is the straight-line amortization technique for a bond discount or premium?arrow_forwardKayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts $ 525,000 400,000 450,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1% interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for Interest on loan All items excluding interest Total cash…arrow_forward
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