Salem Company has outstanding $100 million of 7% bonds, due in 7 years, and callable at 104. The bonds were issued at par and are selling today at a market price of 94.
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- Pls answer number 8 with solutions On January 1, 20x1, Zevrek Co. issues bonds with face amount of ₱4,000,000 for ₱4,100,000. The bonds mature on December 31, 20x4 and pay annual interest of 16%. The bonds can be converted into 10,000 of Zevrek Co.’s ordinary shares with par value of ₱300 per share. On January 1, 20x1, the bonds, without the conversion feature, were selling at a price that reflects a yield rate of 18%. On January 1, 20x3, all the bonds were retired. Zevrek Co. paid a call premium of ₱300,000 on the retirement. On retirement date, the bonds, without the conversion feature, were selling at 105. How much is the gain (loss) on the retirement of the bonds? a. 325,247 b. (325,247) c. 125,247 d. 0Chapter 15 Quiz Hide or show questions Question Content Area A partial listing of accounts and ending balances for Carver, Inc., on December 31, 2020, is shown below: Investments in long-term notes receivable $40,000 Bonds payable 300,000 Temporary investment in equity securities available for sale 120,000 Premium on bonds payable 26,000 Common stock 180,000 Subscriptions receivable: common stock 120,000 Additional paid-in capital from preferred stock conversion 24,000 Retained earnings 650,000 Preferred stock 300,000 Long-term investment in equity securities available for sale 150,000 Additional paid-in capital on common stock 910,000 Common stock subscribed 20,000 Goodwill 46,000 Donated capital 35,000 Preferred stock subscribed 50,000 Additional paid-in capital on preferred stock 45,000 Following is additional information relative to the above accounts: The preferred stock is 8% cumulative with par value of…Pls answer number 10 with solutions On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, ₱4,000, 12%, 3-year bonds for ₱4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year-end. In addition, SALIENT incurred bond issue cost of ₱213,388. What is the effective interest rate on the bond issue? a. 8% c. 12% b. 10% d. 13%
- H3. On a given day a share dealer maintains a bid price of R1 000.50 for a bond and an ask price of R1 003.25. The dealer made 10 trades that totalled 500 bonds traded that day. What was the dealer's gross trading profit for this bond? Please show proper step by step calculationCheck my workCheck My Work button is now enabled1 Item 1 Item 1 1.5 points Item Skipped Tanner-UNF Corporation acquired as a long-term investment $180 million of 7.0% bonds, dated July 1, on July 1, 2021. Company management has the positive intent and ability to hold the bonds until maturity. The market interest rate (yield) was 9% for bonds of similar risk and maturity. Tanner-UNF paid $160.0 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $160.0 million. Required:1. & 2. Prepare the journal entry to record Tanner-UNF’s investment in the bonds on July 1, 2021 and interest on December 31, 2021, at the effective (market) rate.3. At what amount will Tanner-UNF report its investment in the December 31, 2021, balance sheet?4. Suppose Moody’s bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the…M 10 Selected transactions on the books of Sheridan Corporation follow:May 1, 2023 Bonds payable with a par value of $720,000, dated January 1, 2023, are sold at 109 plus accrued interest.They are coupon bonds, bear interest at 11% (payable annually at January 1), and mature on January 1, 2033. (Use int exp as accrued) Dec. 31Adjusting entries are made to record the accrued interest on the bonds and the amortization of the proper amount of premium (use the straight-line method) Jan. 1, 2024Interest on the bonds is paid. April 1Par value bonds of $360,000 are repurchased at 105 plus accrued interest and are retired. (Bond premium is to be amortized only at the year-end, Dec. 31Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortize(a) Assume that Sheridan follows ASPE. Prepare the journal entries for the transactions above. (Round answers to 0 decimal places
- nEEDED IN 10 MINUTES 8. On January 1, 20x1, ABC purchased 12% bonds with face amount of P5,000,000 for P5,380,000. The bonds’ effective yield is 10%. The bonds are dated January 1, 20x1, maturing on January 1, 2025 and pay interest annually every December 31, 0f each year. The bonds are quoted at 120 on December 31, 20x1, and 118 on December 31, 20x2. The entity has elected the fair value option for the bond investment. Compute the total amount that will be shown in ABC’s statement of financial performance for the year ended December 31, 20x2 related to this investment. (sample answer: 10,500 increase or 10,500 decrease)Follow Up Question Pilsen Company issues 12% bonds with a face value of $10,000 and 600 shares of $10 par common stock in a combined sale, receiving total proceeds of $23,000 on December 31.Required:Record the transaction for each independent assumption shown: 2.The common stock has a current market value of $24.50 per share; the bonds are selling at 98. Can you please explain the calculation and the concept for 'premium on common stock'? 23,000 * 14,700 ($24.5 * 600 shares) / $24,500 (what is this, how do you get this?) - $6,000 ThanksQ1)Fuzzy Monkey Technologies purchased as a long-term investment $80 million of 8% quoted bonds, dated January 1, on January 1, 2012. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2012, was $70 million. Required: 1. Prepare the journal entry to record Fuzzy Monkey's investment on January 1, 2012. 2. Prepare the journal entry by Fuzzy Monkey to record interest on June 30, 2012 (at the effective rate). 3. Prepare the journal entries by Fuzzy Monkey to record interest on December 31, 2012 (at the effective rate).
- ANSWER ASAP. ABC Co. lend out 5,000 1,000 face bonds on January 1, 20x1. The bonds are set to mature on December 31, 20x5 with a yearly interest of 12% payable on December 31 of each year. Market interest rates for similar debt instruments are at 10%. What is the Present Value of the Bonds at January 1, 20x1?Kk.215. Gus Limited issued $32 million 7.5 percent, 5 year bonds on October 1, 2022. The market rate of interest on the date of the issue was 8 percent. Interest is payable semi-annually on April 1 and October 1. The company’s year-end is December 31. Required: a. Prepare journal entries to record all transactions during the first year the bonds are outstanding. The company uses the straight-line method of amortizations. b. In good presentation style, indicate how the bond obligation would be shown on the company’s year-end statement of financial position. c. How much interest expense is shown on the 2022 year end income statement? d. How much interest expense will be shown on the 2023 year end income statement?Problem 7-5: Swartz Inc. enters into the following transactions during 2016: July 1: Paid $10,000 to acquire on the open market $10,000 face value of Gallatin bonds. The bonds have a stated annual interest rate of 6% with interest paid semiannually on June 30 and December 31. The bonds mature in 5 ½ years. Oct. 23: Purchased 600 shares of Eagle Rock common stock at $20 per share. Nov. 21: Purchased 200 shares of Montana preferred stock at $30 per share. Dec. 10: Received dividends of $1.50 per share on the Eagle Rock stock and $2.00 per share on Montana stock. Dec. 28: Sold 400 shares of Eagle Rock common stock at $25 per share. Dec. 31: Received interest from the Gallatin bonds. Prepare all necessary journal entries on Swartz’s records to account for its investments during 2016.