Need answer for 12,16 Use the following to answer questions 11 – 15AL issues 4.0%, 20-year bonds with a face amount of$1,000,000 for $986,529.23. The market interest rate forbonds of similar risk and maturity is 4.1%. Interest is paidannually.11.$Determine the interestрayment.12.$(rounded to nearest dollar).Determine interest expense for the first interestраyment.13.What will happen to interest expense each interestpayment? (Increase, decrease, remain constant)What will happen to the bond liability (carryingvalue) each interest payment? (Increase, decrease, remainconstant).14.15.$How much will the company pay outwhen the bonds mature in 20 years (assume all interestpayments have already been paid)?(rounded to nearest dollar) A ten year16. $bond issue with a face amount of $100,000 bears interestat the rate of 5.0%. The current market rate of interest is4.90%. Determine the issue price of this annual bond.

Interest Expense. Face Value x Interest rate. Face value = $1000000 Interest rate = 4% Interest…

Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of $1,000,000 for $986,529.23. The market interest rate for bonds of similar risk and maturity is 4.1%. Interest is pa annually. 11. $ Determine the interest payment. (rounded to nearest dollar). Determine interest expense for the first interest 12. $ payment. :11 1.

Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of $1,000,000 for $986,529.23. The market interest rate for bonds of similar risk and maturity is 4.1%. Interest is pa annually. 11. $ Determine the interest payment. (rounded to nearest dollar). Determine interest expense for the first interest 12. $ payment. :11 1.

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Long-Term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 12.2APR

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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.
On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000 are to be made annually. If the company received proceeds of $112,300, how would the bonds issuance be quoted? A. 1.123 B. 112.30 C. 0.890 D. 89.05
Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
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.)