The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is $20,000. The company calls 50% of the outstanding bonds at a price of $205,000. What is the gain or loss on retirement of bonds?
Q: The face value of Ace Hardware Company's outstanding bonds is $400,000 and unamortized premium is…
A: Unamortized premium pertains tp retirement of bonds = Total Unamortized premium x 50% = $20,000 x…
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A: Calculation of gain or loss on retirement:
Q: On
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Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
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- Pls answer this question 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 c. 125,247 b. (325,247) d. 0Q.Capital Decimation Partners LLP just sold a CDS protecting $20,000,000 worth of bonds at a 500bps spread. What are the quarterly premium payments? A. $125,000 B. $250,000 C. $500,000 D. $750,000 E. $1,000,000Pls 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. 0
- 3. On January 1, 2022, Tony Orlando Industries had outstanding $1,000,000 of 12% bonds with a bookamount of $966,130. The indenture specified a call price of $981,000. The bonds were issued previouslyat a price to yield 14%. Tony Orlando called the bonds (retired them) on July 1, 2022. What is theamount of the loss on early extinguishment?a. $0.b. $6,932.c. $7,241.d. $7,629K2. Unstable Variable Material Company owns bonds from a friendly company called The Followers. They classified these as bonds "available for sale" or AFS. During 2023, Unstable hit pay dirt, and these bonds increased by $4 million. They also received interest of $3 million. Given all these numbers, what's the bottom line effect on Unstable's 2023 financial statements?K3. Four years ago, Microsoft issued 10-year semi-annual bonds that pay an annual rate of 3.5% and face value of $1,000. They are convertible at any time into 4 shares of common stock. What is the market price of the bonds if the yield to maturity is 2.5% and the common shares are trading at $245 per share? The correct answer should be $1,055.40 Can you show me the steps please and do not use excel. Please use equations
- Chunky Cheese Pizza has $61.9 million in bonds payable. The bond indenture states that the debt to equity ratio cannot exceed 3.22. Chunky’s total assets are $201.9 million, and its liabilities other than the bonds payable are $91.9 million. The company is considering some additional financing through leasing. 2. Calculate the debt to equity ratio. (Enter your answers in millions. (i.e., $5,500,000 should be entered as 5.5). Round ratio answer to 2 decimal place.) Debt to Equity Ratio = million millionDurable Co.’s December 30, 20X0, balance sheet contained the following items in the long-term liabilities section: Unsecured 9.375% registered bonds (P25,000 maturing annually beginning in 20x4) ₱275,000 11.5% convertible bonds, callable beginning in 20x9, due 2010 125,000 Secured 9.875% guarantee security bonds, due 2x10 ₱250,000 10.0% commodity backed bonds (P50,000 maturing annually beginning in 20x5) 200,000 What are the total amounts of serial bonds and debenture bonds?On January 1, 20x1, ABC Co. purchased 1 000 000 bonds at a price that reflects a yield rate of 14%. The bonds mature on January 1, 20x4 for trading securities. On December 31, 20x1, the bonds are selling at a yield rate 10%. How much is the unrealized gain (loss) on the change in fair value recognizing ABC's 20x1 profit or loss? Answer, solutions and explanations please.
- on 7/2/Y1 Loch Ness, Inc. purchased 50 of the $1,000 face bonds issued by EBerry Corp. Loch Ness paid $1,000 for each bond. The EBerry Corp. bonds were trading at 108 on 12/31/Y1 and at 98 on 12/31/Y2. Loch Ness sold all 50 of the EBerry bonds on 7/1/Y3 for when the market price was 104. They prepare financial statements on December 31st each year. Prepare all the JE needed for Loch Ness's investment in EBerry. Show calculationQ14 An entity issued 1 500 debentures with face value of R20 000 each. The coupon rate on the debentures is 12% paid annually in arrears. In order to speed the sale of the debentures, the directors decided to issue them at 10% discount. What amount would be recorded by the entity in its statement of financial position under non-current liabilities? Select one: a. R20 000 b. R15 000 000 c. R30 000 000 d. R27 000 000Q23 You are considering an investment in 30 year bond issued by Toy Company. The bonds have no special covenants and the 1 yr T bills are currently earning 5.75% The following information is available: Real risk free rate = 2.5% Default Risk Premium = 1.5% Liquidity risk premium = 0.50% Maturity Risk Premium = 2.00% What is the fair interestrate for the toy company bonds?