Please explain both subparts K-A $10,000 bond redeemable at par on March 12, 2017 is purchased on September 07, 2007 interest is 86% payable semi-annually and the yield is 53% compounded semi-annually(a) What is the cash price of the bond?(b) What is the accrued interest?(c) What is the quoted price?COLX(a) The cash price is $(Round the final answer to the nearest cent as needed Round all intermediate values to soc decimal places as needed)

Calculation of the cash price of a bond

A$19,000 bond redeemable at par on March 12, 2017 is purchased on September 07, 2007 interest is 8 6% payable semi-annually and the yield is 53% compounded semi-annually (a) What is the cash price of the bond?

A$19,000 bond redeemable at par on March 12, 2017 is purchased on September 07, 2007 interest is 8 6% payable semi-annually and the yield is 53% compounded semi-annually (a) What is the cash price of the bond?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.15MCE

See similar textbooks

Related questions

Q: Carla Vista Garage Co. accepts the following forms of payment: Visa, MasterCard, the Carla Vista…

A: Journal entries recording is the initial step of accounting cycle process, under which atleast one…

Q: At December 31, 2017, Arnold Corporation reported the following plant assets. Land $ 3,000,000…

A: Depreciation :— The monetary value of an asset decreases over time due to use, wear and tear or…

Q: Halpern Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During…

A: Journal Entry :- A journal entry is the act of recording any transaction, whether one that is…

Q: Amortization of bond premium decreases interest expense, while amortization of discount increases…

A: The bonds are the financial instruments for the business which are issued by business to raise the…

Q: Dave Krug finances a new automobile by paying $7,000 cash and agreeing to make 40 monthly payments…

A: According to the given question, we are required to compute the present value of the loan and the…

Q: September 1, 2021, Imperial Corporation issued $1,000,000, 6%, 10-year bonds. Interest is payable…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: You have been asked to forecast the additional funds needed (AFN) for Houston, Hargrove, &…

A: AFN = Projected increase in assets – spontaneous increase in liabilities – increase in retained…

Q: 6. An example of a contra-revenue account found on the Income Statement is the M O A. Sales Returns…

A: A revenue account that is anticipated to have a debit balance is referred to as a contra revenue…

Q: On December 31, 2020, Berclair Inc. had 600 million shares of common stock and 3 million shares of…

A: Introduction Convertible bond: An investment fixed-income corporate bonds asset known as a…

Q: You just bought an asset with a straight line depreciation of $6200 per year for the next 8 years.…

Q: The J3 Corp has the following classes of share capital outstanding as of Dec 31, 2021. Ordinary…

A: The preference share are paid dividend each year but some time if not paid than non cumulative are…

Q: On December 31, 2020, Plank Corporation issued $800,000, 6%, 5-year bonds for $735,100. The bonds…

A: PREPARATION OF BOND DISCOUNT SCHEDULE

Q: Popeye Company purchased a machine for $350,000 on January 1, 2020. Popeye depreciates machines of…

A: Decrease in the value of fixed assets are called depreciation, calculation of depreciation under…

Q: How much of the above payments are deductible from gross income?

A: Gross income is the income which has been earned by the company when the same has been computed as…

Q: 1. A computer table sells for $198.50 and costs $158.70. Find the markup. Find the rate of markup…

A: Markup and Markup rate: Difference between the selling price of the product and the cost of the…

Q: roblem 8-3A Establishing, reimbursing, and increasing petty cash LO P2 Nakashima Gallery had the…

A: Introduction: A journal entry is used to record a business transaction in the accounting system of a…

Q: Choose one appropriate statement. 1. The movement of stock prices have certain patterns, and…

A: Answer:- Stock meaning:- A stock is a very broad term that generally refers to any company's…

Q: [The following information applies to the questions displayed below] Shadee Corp. expects to sell…

A: Labor cost is the cost incurred by the company on the labor involved in the production process of…

Q: Randall Company manufactures products to customer specifications. A job costing system is used to…

A: Overhead cost is applied on an estimated basis, based on direct labor cost (in this question).…

Q: TB MC Qu. 5-63 (Algo) Manufacturing overhead: Metal Company Metal Company budgeted $564,000…

A: Manufacturing overhead includes the indirect costs incurred in the production process. It includes…

Q: The Litton Company has established standards as follows: Direct material Direct Labor Variable…

A: Labour Rate Variance :— It is the difference between standard labour cost & actual labour cost.…

Q: Your firm sells high-end road and mountain bikes and related accessories. The following information…

A: Customer retention is the term which is defined as company ability to retain the customers over…

Q: What amount should be capitalized as the cost of the new equipment?

A: As per the relevant IFRS "PPE", all the costs incurred by the Business Entity, to bring the Asset…

Q: Garza Company had sales of $145.000, sales discounts of $2,175, and sales retums of $3,480 Garza…

A: Sale is the amount of goods sold by an entity and through this an entity earned revenue. The net…

Q: Required information [The following information applies to the questions displayed below.] The…

A: Horizontal Model - A horizontal Model is a worksheet where all the transactions are posted on their…

Q: The 5s principle specifically defines a system for organizing and standardizing the workplace. What…

A: 5S seems to be a useful technique for detecting and reducing unproductive organizational activities.…

Q: Refer to the following selected financial information from Texas Electronics. Compute the company's…

Q: Calculate direct materials and direct labour variances. E12.31 (LO 2, 3) Jay Levitt Company budgeted…

A: Actual price per unit = $31,2006,500 kg = $4.8 per kg Standard quantity for actual output = 2,750…

Q: Assets Current assets: Cash Accounts receivable Inventory Prepaid rent Long-term assets: Investments…

A: The cash flow statement is one of the financial statement of the business which keeps the track of…

Q: During Ramadhan, Miss Lenny sells varieties of Malay’s traditional food for iftar. She cooks curry…

A: The cost of the product means the total of all of the expenses that are incurred in the production…

Q: Maples Corporation is a Canadian subsidiary of a U.S. parent company. Shown below is the company's…

A: 1. Particulars In CAD $M Translation rate Amt in USD $M Sales 480.7 0.76 365.33 Cost of Goods…

Q: How much is the gain on debt restructuring?

A: Meaning Of Debt restructuring Debt Restructuring is opted to avoid risk of defaulting payment of…

Q: Use direct method Comparative Balance Sheets Current assets Cash at Bank Accounts Receivable Less:…

A: A cash flow statement shows flows of cash during a specific period under different activities. There…

Q: Murray has made his decision and Lotus Coffee Inc. issued $60,000 of 5%, 3-year bonds on July 1,…

A: Lets understand the basics. When market rate of interest is lower than the bond interest rate then…

Q: On July 1, 2021, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid…

A: The share and security acquired by the business entity are classified as assets. The ending balance…

Q: Blue Company sold a car to a customer at a price of P400,000 with a production cost of P300,000 on…

Q: A stock has a required return of 7%, the risk-free rate is 2.5%, and the market risk premium is 3%.…

A: Required rate of return as per CAPM :— Expected Return = Rf + (Rm - Rf) beta of the…

Q: De Law Construction has a gotten some construction jobs to build some starter housing units in a few…

A: A due date is that date wherein something falls due, especially the payment of a bill or Emi of a…

Q: Krall Company recently had a computer malfunction and lost a portion of its accounting records. The…

A: Workings:

Q: Golden Inc. is considering one of the three following courses of action: (1) paying a $0.4 cash…

A: Before action After Cash dividend After stock dividend Total Assets $1369000 $1329000 $1369000…

Q: The shareholder' equity of L Corp on Dec 31, 2021 follows: 10% Preference share capital P100 par,…

A: Issue of shares is one of the source of capital for the business. There can be common shares or…

Q: What is the difference between job order costing and process costing? What types of companies use…

A: Costing is the Process of Computing cost of Manufacturing of goods or provision of services. Costing…

Q: On December 1, 2021, CAF Corporation declared equipment as a property dividend payable on January…

A: Dividends are the share of profits which is being divided to shareholders in order of cash, stock or…

Q: The shareholder’ equity of L Corp on Dec 31, 2021 follows: 10% Preference share capital P100…

A: Preference share capital is the capital which gets preference over the equity share capital in terms…

Q: L. Prepare a differential analysis as of July 1 presenting the proposed operation of the store for…

A: Introduction Retail store: Retail firms provide goods or services to clients for their use,…

Q: The H2 Corp has the following classes of share capital outstanding as of Dec 31, 2021. Ordinary…

A: Preferred shares are paid dividend each year but often they are not paid each year but remaining…

Q: following pension plan information is for Jin Company at December 31, 2018. Defined benefit…

A: Company pay the pensions to employees and there must be sufficient provisions should be made so that…

Q: The following accounts and balances are taken from Evan Company's adjusted trial balance:…

A: Closing entries are prepared at the time of preparation of financial statements for a specific…

Q: Preble Company manufactures one product. Its variable manufacturing overhead is applied to…

A: Lets understand the basics. Management prepares flexible budget so as to determine sales revenue,…

Q: The shareholders' equity section of the statement of financial position of ABC Co. contains the…

Question

Please explain both subparts

K-
A $10,000 bond redeemable at par on March 12, 2017 is purchased on September 07, 2007 interest is 86% payable semi-annually and the yield is 53% compounded semi-annually
(a) What is the cash price of the bond?
(b) What is the accrued interest?
(c) What is the quoted price?
COLX
(a) The cash price is $
(Round the final answer to the nearest cent as needed Round all intermediate values to soc decimal places as needed)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Monitoring By the Board of Directors and Others

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Brief Exercise (Appendix 9A) Bond Issue Price On January 1, 2020, Ruby Inc. issued 3,000 $1,000 par value bonds with a staled rate of6% and a 10-year maturity. Interest is payable semiannually on June 30 and December 31. Required: What is the issue price if the bonds are sold to yield 8%? {Note: Round to nearest dollar.)
Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?
On October 1 a company sells a 3-year, $2,500,000 bond with an 8% stated interest rate. Interest is paid quarterly and the bond is sold at 89.35. On October 1 the company would collect ________. A. $200,000 B. $558,438 C. $2,233,750 D. $6,701,250
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
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.
Cornerstone Exercise (Appendix 9A) Bond Issue Price On January 1, 2021, Callahan Auto issued $900,000 of 9%, 10-year bonds. Interest is payable semiannually on June 30 and December 31. Required: What is the issue price if the bonds are sold to yield 8%? (Note: Round to the nearest dollar.)