GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Chapter 10, Problem 10.3E
a.
To determine
Calculate the issuance price of the bonds, if market interest rate is 8%.
b.
To determine
Calculate the issuance price of the bonds, if market interest rate is 6%.
c.
To determine
Calculate the issuance price of the bonds, if market interest rate is 9%.
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Trew Company plans to issue bonds with a face value of $904,500 and a coupon rate of 6 percent. The bonds will mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds are sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar.)
Determine the issuance price of the bonds assuming an annual market rate of interest of 8.5 percent.
I don't know how to get the issuance price.
On January 1, 2020, XYZ Co. issued 8-year bonds with a face value of $1,500,000 and a stated (nominal) interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 4%. :
Instructions
(a) Calculate the selling price of the bonds payable. HINT: You will need to look up the appropriate discount values in the present value tables
(b) Prepare the interest amortization table for 2020 only, assuming that amortization is recorded on interest payment dates.
On January 1, 2020, Everly Bottle Company sold $4,000,000 in long-term bonds. The bonds
will mature in 4 years and have a stated interest rate of 10% and a yield rate of 8%. The
bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for
under the effective-interest method.
Instructions:
1. Calculate the bond proceeds using the attached present value tables, Excel, or a financial
calculator.
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Chapter 10 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 10 - From the perspective of the issuer, what are some...Ch. 10 - What are the primary characteristics of a bond?...Ch. 10 - Prob. 3QCh. 10 - Differentiate between a bond indenture and a bond...Ch. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - What is the book value of a bond?Ch. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Prob. 12QCh. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQCh. 10 - Prob. 7MCQCh. 10 - Prob. 8MCQCh. 10 - Prob. 9MCQCh. 10 - Prob. 10MCQCh. 10 - Prob. 10.1MECh. 10 - Computing the Price of a Bond Issued at Par LO10-2...Ch. 10 - Understanding Financial Ratios 0-3, 10-6 The...Ch. 10 - Computing the Times Interest Earned Ratio LO10-3...Ch. 10 - Computing the Price of a Bond Issued at a Discount...Ch. 10 - Recording the Issuance and Interest Payments of a...Ch. 10 - Prob. 10.7MECh. 10 - Prob. 10.8MECh. 10 - Prob. 10.9MECh. 10 - Prob. 10.10MECh. 10 - Prob. 10.11MECh. 10 - Prob. 10.12MECh. 10 - Prob. 10.13MECh. 10 - Prob. 10.14MECh. 10 - Prob. 10.1ECh. 10 - Prob. 10.2ECh. 10 - Prob. 10.3ECh. 10 - Computing Issue Prices of Bonds Sold at Par, at a...Ch. 10 - Prob. 10.5ECh. 10 - Prob. 10.6ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - (Chapter Supplement) Recording and Reporting a...Ch. 10 - Prob. 10.10ECh. 10 - Prob. 10.11ECh. 10 - Explaining Why Debt Is Issued at a Price Other...Ch. 10 - Prob. 10.13ECh. 10 - Prob. 10.14ECh. 10 - Prob. 10.15ECh. 10 - Prob. 10.16ECh. 10 - Prob. 10.17ECh. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - Prob. 10.21ECh. 10 - Prob. 10.22ECh. 10 - Prob. 10.23ECh. 10 - Prob. 10.24ECh. 10 - Prob. 10.1PCh. 10 - Prob. 10.2PCh. 10 - Comparing Bonds Issued at Par, at a Discount, and...Ch. 10 - Prob. 10.4PCh. 10 - Prob. 10.5PCh. 10 - Recording and Reporting Bonds Issued at a Discount...Ch. 10 - Recording and Reporting a Bond Issued at a...Ch. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Prob. 10.10PCh. 10 - Prob. 10.11PCh. 10 - Prob. 10.12PCh. 10 - Prob. 10.13PCh. 10 - Prob. 10.14PCh. 10 - Prob. 10.15PCh. 10 - Prob. 10.16PCh. 10 - Prob. 10.1APCh. 10 - Prob. 10.2APCh. 10 - Prob. 10.3APCh. 10 - Prob. 10.4APCh. 10 - Prob. 10.5APCh. 10 - Prob. 10.6APCh. 10 - Recording and Reporting a Bond Issued at a Premium...Ch. 10 - Prob. 10.8APCh. 10 - Prob. 10.1CONCh. 10 - Prob. 10.1CPCh. 10 - Prob. 10.2CPCh. 10 - Prob. 10.3CPCh. 10 - Prob. 10.4CPCh. 10 - Prob. 10.5CPCh. 10 - Evaluating an Ethical Dilemma LO 10-1 Assume that...
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- On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020. 4. Prepare the journal entry to record the first payment and amortization of the discount/premium on July 1, 2020. 5. Prepare the journal entry to record the accrued interest and amortization of the discount/premium on December 31, 2020. 6. Prepare the journal entry to record the payment of the bonds at maturity; January 1, 2025. Assume the appropriate accrual was made on December 31, 2024 (see 5. above)arrow_forwardOn January 1, 2024, Tableau Company issues $20 million of 9% bonds, due in six years, with interest payable semiannually on June 30 and December 31 each year. Use a financial calculator or Excel. Required: 1. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 2. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. 3. If the market rate is 10%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price. Help Save & (Do not round intermediate calculations. Round final answer to the nearest dollar amount. Enter your answer in dollars, not in millions.) 1. The bonds issue at 2. The bonds issue at 3. The bonds issue at and the issue price is and the issue price is and the issue price isarrow_forwardOn January 1, 2020, Johny Industries issued ten-year bonds with a face value of $2,000,000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Calculate the issue price of the bond. You may use Excel.arrow_forward
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