1.
Concept Introduction
Bonds: The assets which are securitized versions of the corporate debt that is issued by businesses are named bonds. As bondholders are given a fixed amount of interest, bonds are considered fixed-income instruments.
Whether the issuance of bonds is at par, premium, or discount.
2.
Concept Introduction
Bonds: The assets which are securitized versions of the corporate debt that is issued by businesses are named bonds. As bondholders are given a fixed amount of interest, bonds are considered fixed-income instruments.
Whether the issuance of bonds is at par, premium, or discount.
3.
Concept Introduction
Bonds: The assets which are securitized versions of the corporate debt that is issued by businesses are named bonds. As bondholders are given a fixed amount of interest, bonds are considered fixed-income instruments.
Whether the issuance of bonds is at par, premium, or discount.
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FINANCIAL+MANAG.ACCT.
- Issue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.arrow_forwardOn January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?arrow_forwardFor the given bond, whose interest rate is provided, find the semiannual interest payment and the total interest earnedover the life of the bond. 1) $2000 Max-Mart Stores 5-year bond at 6.75%arrow_forward
- Calculate the bond issue price for the issue of a $252,000, 8%, 3-year bond. The market rate is 9%.arrow_forwardDetermining Bond Selling Price Calculate the bond selling price for the following three separate scenarios. a. 33M Corp. authorized and issued $100,000, 6%, 20-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate on similar bonds is 8%. b. 33M Corp. authorized and issued $250,000, 7%, 10-year bonds payable on January 1. Calculate the selling price of the bonds if the bonds pay cash interest semiannually on July 1 and January 1, and the market rate on similar bonds is 6%. c. 33M Corp. issued $75,000, 5%, 10-year bonds payable on March 31 of Year 1. The bonds were authorized on January 1 of Year 1. Calculate the selling price of the bonds (including interest) if the bonds pay cash interest annually on January 1, and the market rate on similar bonds is 6%. Note: Round answers to the nearest whole dollar. a. $ 80,207 b. $ 268,597 C. $ 69,479 *arrow_forwardTwo bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be: Bond A Bond B A. $739.29 $1,174.03 B. $740.61 $1,172.04 C. $739.29 $1,192.04arrow_forward
- A$ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity. Calculate the purchase price and discount on the bond if the quoted price on the date of purchase was 95.2. O a. Purchase Pricer= $ 23, 800 Discount = $ 1, 200 O b. Purchase Price = $20, 000 Discount = $ 1, 400 %3! O . Purchase Price = $ 25, 000 Discount = $ 1,200 %3D O d. Purchase Price = $ 18, 500 Discount = $ 1, 500arrow_forwardssue Price of a Bond May Enterprises issued $200,000 of six percent, five-year bonds with interest payable semiannually. Determine the issue price if the bonds are priced to yield (a) six percent, (b) ten percent, and (c) two percent. Use financial calculator or Excel to calculate answers. Round answers to the nearest whole number. a.) Answerarrow_forwarda. On January 1, 20X1, your firm issues a $15,000, 4-year, 5% bond with interest payable annually for $13,056. At the time of the issuance, market rates are 9%. Journalize the issuance of the bond. b. Journalize the first annual interest payment on December 31, 20X1. c. Journalize the amortization of the premium/discount on December 31, 20X1. (If necessary, round to the nearest dollar.) d. On January 1, 20X2, the bonds are called at 99. Journalize this transaction.arrow_forward
- ssue Price of a Bond May Enterprises issued $200,000 of six percent, five-year bonds with interest payable semiannually. Determine the issue price if the bonds are priced to yield (a) six percent, (b) ten percent, and (c) two percent. Use financial calculator or Excel to calculate answers. Round answers to the nearest whole number.arrow_forwardThe following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period $2,125,000Interest paid during period 160,000 Interest expense allocable to the period 148,750 (a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginningof the period? (c) What account was debited to amortize the discount or premium?arrow_forwardBond A is a 15-year, 10.50% semiannual-pay bond priced with a yield to maturity of 8.00%, while Bond B is a 15-year, 7.35% semiannual-pay bond priced with the same yield to maturity. Given that both bonds have par values of $1,000, the prices of these two bonds would be: Bond A Bond B A. $1,216.15 $944.67 B. $1,216.15 $913.54 C. $746.61 $913.54arrow_forward
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