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- For items 1-3: The Peninsula Corporation issued a new series of bonds on January 1, 1992. The bonds were sold at par (P1,000), had a 12% coupon, and mature in 30 years, on December 31, 2021. Coupon payments are made semiannually (on June 30 and December 31). What was the YTM on January 1, 1992? What was the price of the bonds on January 1, 1997, five (5) years later, if interest rates had fallen to 10%? Find the current yield, capital gains yield, and total return on January 1, 1997, given the price as determined in partThe Pennington Corporation issued a new series of bonds on January 1, 1979. The bonds were sold at par (P1,000), have a 12% coupon, and mature in 30 years on December 31, 2008. Coupon payments are made semiannually (on June 30 and December 31).(a) What was the YTM of Pennington’s bonds on January 1, 1979?(b) What was the price of the bond on January 1, 1984, 5 years later assuming that the level of interest rate had fallen to 10%?(c) Find the current yield and capital gains yield on the bond on January 1, 1984, given the price as determined in Question b.(d) On July 1, 2002, Pennington’s bonds sold for P916.42. What was the YTM at that date?(e) What were the current yield and capital gains yield on July 1, 2002On July 1, 20X1, Mirage Company issued $250 million of bonds with an 8% coupon interest rate. The bonds mature in 10 years and pay interest semiannually on June 30 and December 31 of each year. The market rate of interest on July 1, 20X1, for bonds of this risk class was 8%. Mirage closes its books on December 31. Ignore income taxes. Use the following links to the present value tables to calculate answers. (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: At what price were the bonds issued? On July 1, 20X3, the market interest rate for bonds of this risk class is 6%. What is the fair value of the bonds on this date? Suppose that 50% of the bonds were repurchased for cash on July 1, 20X3, at the market price. What journal entry would the company make to record this partial retirement? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate…
- The Pennington Corporation issued a new series of bonds on January 1, 1978. The bonds were sold at par ($1,000), have a 12 percent coupon, and mature in 30 years, on December 31, 2007. Coupon payments are made semiannually (on June 30 and December 31). What was the YTM of Pennington’s bonds on January 1, 1978? 2. What was the price of the bond on January 1, 1983, 5 years later, assuming that the level of interest rates had fallen to 10 percent? 3. Find the current yield and capital gains yield on the bond on January 1, 1983, given the price as determined in part b. 4. On July 1, 2001, Pennington’s bonds sold for $916.42. What was the YTM at that date? 5. What were the current yield and capital gains yield on July 1, 2001?When the market rate of interest was 12%, Halprin Corporation issued $701,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was? Use the present value tables in Exhibit 8 and Exhibit 10. Oa. $3,985,631 Ob. $4,155,507 O c. $700,997 O d. $661,389The Pennington Corporation issued a new series of bonds on January1, 1994. The bonds were sold at par ($1,000), had a 12% coupon, and mature in 30 years, onDecember 31, 2023. Coupon payments are made semiannually (on June 30 and December 31).a. What was the YTM on January 1, 1994?b. What was the price of the bonds on January 1, 1999, 5 years later, assuming that interestrates had fallen to 10%?c. Find the current yield, capital gains yield, and total return on January 1, 1999, giventhe price as determined in part b.d. On July 1, 2017, 6½ years before maturity, Pennington’s bonds sold for $916.42. What werethe YTM, the current yield, the capital gains yield, and the total return at that time?e. Now assume that you plan to purchase an outstanding Pennington bond on March 1,2017, when the going rate of interest given its risk was 15.5%. How large a check mustyou write to complete the transaction?
- 1. On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%.The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of thebonds? Explain why the cash received from selling this bond is different from the $200,000 face value of thebondOn January 1, 20X5, Seymond Corporation issued $100,000 in 10-year, zero-coupon bonds. The interest rate is 5% and Seymond uses the effective interest rate method."A. Record the issuance of the bonds. B. Record the interest accrual on December 31, 20X5. C. Record the interest accrual on December 31, 20X6. "On January 1 of this year, Nowell Company issued bonds with a face value of $250,000 and a coupon rate of 8.0 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. When the bonds were sold, the annual market rate of interest was 8.0 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Required: 1. What was the issue price on January 1 of this year?
- The Pennington Corporation issued a new series of bonds on January 1, 1987. The bonds were sold at par ($1,000), had a 12% coupon, and matured in 30 years on December 31, 2016. Coupon payments are made semiannually (on June 30 and December 31). a. What was the YTM on the date the bonds were issued? b. What was the price of the bonds on January 1, 1992 (5 years later), assuming that interest rates had fallen to 10%? c. Find the current yield, capital gains yield, and total yield on January 1, 1992, given the price as determined in part b. d. On July 1, 2010 (6.5 years before maturity), Pennington’s bonds sold for $916.42. What are the YTM, the current yield, and the capital gains yield for that date? e. Now assume that you plan to purchase an outstanding Pennington bond on March 1, 2010, when the going rate of interest given its risk is 15.5%. How large a check must you write to complete the transaction? (Hint: Don’t forget the accrued interest.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 July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of the bonds? Explain why the cash received from selling this bond is different from the $200,000 face value of the bond.
