On January 1, Ruiz Company issued bonds as follows: Face Amount: $500,000 Number of Years: 15 Stated Interest Rate: 7% Interest payments per year Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking th this worksheet). Note: Rounding is not required. a) Annual Market Rate 9%

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 77E
icon
Related questions
Question
C20
fx
A
В
C
G
20
21
b)
Annual Market Rate
6.00%
22
Semiannual Interest Payment:
$17,500
23
PV of Face Amount:
24
+ PV of Interest Payments:
25
Bond Selling Price:
26
27 2. Use the answer either "Premium" or "Discount" to the following items.
28
29 The bond in (a) sold at a:
Discount
30 The bond in (b) sold at a:
Premium
31
32 3. Use the Excel PV function to verify the selling prices of the bonds.
33
a)
Annual Market Rate
9%
34
Bond Selling Price
35
36 b)
Annual Market Rate
6%
37
Bond Selling Price
38
39
40
Transcribed Image Text:C20 fx A В C G 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 + PV of Interest Payments: 25 Bond Selling Price: 26 27 2. Use the answer either "Premium" or "Discount" to the following items. 28 29 The bond in (a) sold at a: Discount 30 The bond in (b) sold at a: Premium 31 32 3. Use the Excel PV function to verify the selling prices of the bonds. 33 a) Annual Market Rate 9% 34 Bond Selling Price 35 36 b) Annual Market Rate 6% 37 Bond Selling Price 38 39 40
C20
fx
A
В
C
On January 1, Ruiz Company issued bonds as follows:
3
4
Face Amount:
$500,000
5
Number of Years:
15
Stated Interest Rate:
7%
7
Interest payments per year
2
8.
9.
Required:
10 1) Calculate the bond selling price given the two market interest rates below.
11
Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottor
12 this worksheet).
13
Note: Rounding is not required.
14
15
a)
Annual Market Rate
9%
16
Semiannual Interest Payment:
$17,500
17
PV of Face Amount:
18
PV of Interest Payments:
19
Bond Selling Price:
0.00
20
21
b)
Annual Market Rate
6.00%
22
Semiannual Interest Payment:
$17,500
23
PV of Face Amount:
24
PV of Interest Payments:
25
Bond Selling Price:
%3D
26
A Future Value of Annuity of $1
A Present Value of Annuity of $1
A Graded Worksheet
II
Transcribed Image Text:C20 fx A В C On January 1, Ruiz Company issued bonds as follows: 3 4 Face Amount: $500,000 5 Number of Years: 15 Stated Interest Rate: 7% 7 Interest payments per year 2 8. 9. Required: 10 1) Calculate the bond selling price given the two market interest rates below. 11 Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottor 12 this worksheet). 13 Note: Rounding is not required. 14 15 a) Annual Market Rate 9% 16 Semiannual Interest Payment: $17,500 17 PV of Face Amount: 18 PV of Interest Payments: 19 Bond Selling Price: 0.00 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 PV of Interest Payments: 25 Bond Selling Price: %3D 26 A Future Value of Annuity of $1 A Present Value of Annuity of $1 A Graded Worksheet II
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Accounting for Long-term liabilities
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
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
Financial & Managerial Accounting
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College