What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $925, if it pays 6% fixed interest for the duration of the bond?.
Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $925,…
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Q: What is the yield on a corporate bond with a $1000 face value purchased at a discount price of $925,…
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What is the yield on a corporate bond with a $1000
face value purchased at a discount price of $925, if
it pays 6% fixed interest for the duration of the
bond?.
yield = [ ? ] %
Give your answer as a percent rounded to the nearest
hundredth.
Hint: yield = interest paid
price paid
Enter
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- Proctec Trust Inc. issued $100,000, 5 year bond on January 1, 2018 paying 4% intereston a semi-annual basis every January 1 and July 1.InstructionsUsing a financial calculator, or tables on pg. 550 – 551(students can also use pre-builtexcel formulas if they are expert users of excel program) prepare the first year journalentries for the bond issue and interest expense assuming that the company uses theeffective interest method, a market interest rate of 6% and has a year-end of December31, 2018.Journalize the entries to record the following selected bond investment transactions for Dip, Inc. You MUST use the accounts outlined in the Chapter 15 narrated PowerPoint presentations – the accounts in your textbook aren’t descriptive enough. Journal entry descriptions are not required. *(Must include all supporting calculations) Date Transaction Description 4/1/2022 Purchased for cash, $50,000 of Bump, Inc. 9% bonds at 100 plus accrued interest. The bonds pay interest on January 31st and July 31st. 7/31/2022 Received the semiannual interest payment. 10/31/2022 Sold $20,000 of bonds at 104 plus accrued interest. 12/31/2022 Accrued interest. 12/31/2022 Marked the debt investments to a market value of $34,000. The debt investments are classified as available for sale investments. 12/31/2023 Market the debt investments to a market value of $31,000. The debt investments are classified as available for sale investments.aa.2 Assumes Venture Healthcare sold bonds that have a ten-year maturity, a 12 percent coupon rate with annual payments, and a $1,000 par value. What would be the bonds value? Hint: Watch the Homework Hint video to figure out how to calculate this using Excel. Choice: $750 Choice: $1,000 Choice: $1,500 Choice: $2,000
- The following investment account was taken from the general ledger of One Dream Investment Company: Debt Investments - Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027) Date PR Debit Credit Balance January2, 2022 VR VR P1,812,300 P1,812,300 June 30, 2022 CRJ 60,000 1,752,300 Dec. 31, 2022 CRJ 60,000 1,692,300 Dec. 31, 2022 195,000 1,497,300 In the course of your examination, you obtained the following information: Interest checks were received on June 30 and December 31 and were credited to the investment account. One dream sold P200,000 of its investment on December 31, 2022 for P195,000. Effective interest rate on this investment, as computed by your audit staff, is 8%. (4% - semi annual) One Dream included this investment in a portfolio that is held to collect and for sale. The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively. How much is the gain or…eBook Show Me How Alternative Financing Plans Desmond Co. is considering the following alternative financing plans: Plan 1 Plan 2 Issue 5% bonds (at face value) $3,000,000 $1,000,000 Issue preferred $1 stock, $20 par — 3,000,000 Issue common stock, $10 par 3,000,000 2,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that income before bond interest and income tax is $400,000. Enter answers in dollars and cents, rounding to two decimal places. Plan 1 $fill in the blank 1 Earnings per share on common stock Plan 2 $fill in the blank 2 Earnings per share on common stockThe first day of the fiscal year, a company issues a $700,000, 6%, 10-year bond that pays semiannual interest of $21,000 ($700,000 × 6% × ½ year), receiving cash of $700,000. Question Content Area a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash Cash Bonds Payable Bonds Payable Feedback Area Feedback Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Question Content Area b. Journalize the entry to record the first interest payment. If an amount box does not require an entry, leave it blank. Interest Expense Interest Expense Cash Cash Feedback Area Feedback The interest payment is calculated using the following formula: Principle x Interest Rate x Time. Question Content Area c. Journalize the entry to record the payment of…
- On Thursday, July 22, 2010, you bought (traded) the FG, Inc. 6.75% corporate bonds for $101.25. The coupon payments are paid on May 31 and November 30. Using the 360-day accrual basis, calculate the invoice price of the bonds. Please use T+3 to calculate the settlement day. Group of answer choices 1023.00 1022.25 1024.10 1023.19Stealth Fitness Center issues 9%, 7-year bonds with a face amount of $300,000. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually. At what price will the bonds be issued? Use a financial calculator or Excel. (Do not round intermediate calculations. Round final answer to the nearest dollar amount.)Your company sells $41,000 of one-year, 12% bonds for an issue price of $39,500. The journal entry to record this transaction will include a credit to Bonds Payable in the amount of: Multiple Choice $39,500. $41,000. $44,420. $45,920.
- Please type the answer very fast i ll upvote , Thank You On January 1, 2024, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $560,000 of 7% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. 1. If the market interest rate is 7%, the bonds will issue at $560,000. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and December 31, 2024. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) 1a. Record the bond issue. 1b. Record the first semiannual interest payment. 1c. Record the second semiannual interest payment. 2. If the market interest rate is 8%, the bonds will issue at $511,582. Record the bond issue on January 1, 2024, and the first two semiannual interest payments on June 30, 2024, and December 31, 2024. (If no entry is required for a particular transaction/event, select…The following investment account was taken from the general ledger of One Dream Investment Company: Debt Investments - Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027) Date PR Debit Credit Balance January 2, 2022 VR P1,812,300 P1,812,300 June 30, 2022 CRJ 60,000 1,752,300 Dec. 31, 2022 CRJ 60,000 1,692,300 Dec. 31, 2022 195,000 1,497,300 In the course of your examination, you obtained the following information: Interest checks were received on June 30 and December 31 and were credited to the investment account. One dream sold P200,000 of its investment on December 31, 2022 for P195,000. Effective interest rate on this investment, as computed by your audit staff, is 8%. One Dream included this investment in a portfolio that is held to collect and for sale. The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively. Question 1: The entry to correct the interest income for 2022…On March 1, 2018, you purchased $1.000.000 face value of a bond that pays an annual coupon of $79 every January 1st. The yield-to-maturity is currently 6%. You agreed with the seller on a price of 96.5% Your back office, which is responsible for sending the correct cash amount, asks you a) how much money they should exactly send to the seller? (assume 365 days calendar basis)? b) if the amount would increase if the yield-to-maturity would increase to 9%? Why? c) if the amount would increase if the coupon rate would be 8%?