Chap009

For this contract I paid $1750 per contract and $8750 for all 5 bonds as per the text book.

1. The City of Newport issued $1,500,000 of general obligation refunding bonds at a 2%

(b) The bonds are sold on August 1, 2011 for $425,000 plus accrued interest. Prepare all entries required to properly record the

Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow.

Sheen’s idea (finance with bond) is to issue $125M bond with an annual interest rate of 6.5% and mature in 15 years. Annual principal repayment is $6.25M and leave $37.5M outstanding at maturity. The cash outlay is $6.25M every year besides the interest. See graph below.

3. The amount due on the date of maturity for a $6,000, 60-day 8%, note receivable is: (Points : 1)

Victoria should report the purchase price of the additional similar bonds as investment in long- term bonds-a noncurrent asset-and the two months' accrued interest as interest receivable-a current asset. The amount paid by Victoria for the two months' interest accrued between the last interest payment and the date of the purchase should not be included in the investment in long-

The face value of the bond is $1000, and the semi-annual coupon payments are $30. The annual coupon rate on the bonds is $60 per bond (or 6%). The futures contract has 100 bonds.

Payback on this bond is 25 years. You pay $1,000. You receive $40 a year for 25 years, a total of $1,000.

Here, Yield To Maturity (YTM) * 2 (Adair, T.A. Jr., Cornett, M.M., Nofsinger, J., 2015)

The bond consists of a 10-year, 10% annuity of $100 per year plus a $1,000 lump sum payment at t = 10:

9. Consider a bond selling at par ($ 100) with a coupon rate of 6% and 10 years to maturity:

An eight-month indexation lag is applied to the calculation for the gilts which were first issued before 2005. The payments on these bonds use the inflation data eight months previously.

The first one is a bond that is currently selling in the bond market at $1,200. The bond has a

A bond or note can be identified by six key pieces of information: name of issuer, coupon, maturity date, dated date, yield and price, and CUSIP number. The name of the issuer is simply the name of the company that has issued the bond. The coupon contains the interest rate and who the bond holder is. The maturity date is the date in which the bond holder received his or her principle. That dated date is the date in which the bond was issued. The yield and price is the yield and price in which the bond holder may receive. The CUSIP number is a unique number in which each and every bond can be easily identified by. The yield of a bond is another way of saying the amount that a bond will pay. The current yield of a bond can easily be calculated by a formula in which the current yield is equal to the coupon divided by the price. If the current yield goes up, then the value of the bond goes down. If the current yield goes down, then the value of the bond goes up. So, the lower the current yield is, the higher the bond value is, the more money or principal an investor makes.