Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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A 12% Pl face value bond with interest payable June 30 and December 31, which matures on June 30, 2026, was purchased at 95 for short term investment purposes on June 30, 2021. At the end of December 31, 2021 , the bonds were quoted at 110. By June 30, 2022, all the bonds were sold at 115. How much would be the total cash that would be received by June 30, 2022?
a.1,000,000
b.1,100,000
c.1,150,000
d.1,210,000
Problem 5:On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021, with a face amount of ₱8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimal places for PV factors)
J. Prepare the journal entries for 2021K. What is the price of the bonds on January 1, 2021?
ces
On June 30, 2024, Single Computers issued 6% stated rate bonds with a face amount of $100 million. The bonds mature on June 30,
2039 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (3.0%)
on June 30 and December 31, beginning on December 31, 2024.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Determine the price of the bonds on June 30, 2024.
2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.
Note: Enter all the values as positive value. Round your final answers to nearest whole dollar amount, not in millions.
Period-End
06/30/2024
12/31/2024
Cash Interest
Paid
Bond…
Chapter B Solutions
Connect Access Card for Financial Accounting: Information and Decisions
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- On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?arrow_forwardExercise Interest Payments and Interest Expense for Bonds (Straight Line) On January 1, 2020, Perry Manufacturing issued bonds with a total face amount of $3,000,000 and a stated rate of 9%. Required: Calculate the interest expense for 2020 if the bonds were sold at par. Calculate the interest expense for 2020 if the bonds were sold at a premium and the straight- line premium amortization for 2020 is $12,000. 3. Calculate the interest expense for 2020 if the bonds were sold at a discount and the straight- line discount amortization for 2020 is $33,000.arrow_forwardSmashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual coupon (payable June 30 and December 31) on January 1, 2018, when the market rate of interest was 10%. Were the bonds issued at a discount or premium? Assuming the bonds sold at 92.288, what was the sales price of the bonds?arrow_forward
- Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market rate of 4%. The bonds paid interest semi-annually on June 30 and Dec. 31. How much money did the company receive when the bonds were issued? The bonds would be quoted at what rate?arrow_forwardIssue Price The following terms relate to independent bond issues: 500 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 500 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 2,000 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Required Assuming the market rate of interest is 10%, calculate the selling price for each bond issue.arrow_forwardProblem 5:On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021, with a face amount of ₱8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimal places for PV factors) 23. How much is the interest expense for the year ended, December 31, 2021?24. How much is the interest expense for the year ended, December 31, 2022?25. What is the carrying amount of the bonds on December 31, 2022?arrow_forward
- Show your solution pls On March 1, 2016, Rose Corporation issued at 103 plus accrued interest, one hundred of its 9%, P1, 000 bonds. The bonds are dated January 1, 2016, and mature on January 1, 2024. Interest is payable semi-annually on January 1 and July 1, Rose paid bond issue costs of P 5,000. Rose would realize net cash receipts from the bond issuance of – *arrow_forward3 General motors issued 10-year bonds in August of 2017. The bonds make semiannual payments occurring on April 1 and October 1 each year, with the first payment on April 1 2018, and the last on October 1, 2027. The coupon rate is 4.2%. (a) Assuming a principal of 100, what would the cash flow be starting from September 30, 2017? (b) The bond is currently selling for $93.03 (per 100 of face value). If you buy the bond today, what would its cash flow be? Is it the same as part a plus the addition of 6.97 (100 - 93.03)?arrow_forwardProblem 5: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of P8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimal places for PV factors) J. Prepare the journal entries for 2021 K. Compute or provide the answers for the following: 22. Determine the price of the bonds on January 1, 2021. 23. How much is the interest expense for the year ended, December 31, 2021? 24. How much is the interest expense for the year ended, December 31, 2022? 25. What is the carrying amount of the bonds on December 31, 2022?arrow_forward
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