A city wishes to finance the cost of a new sports arena through the issue of a $4 million, 20-year bond. The bond pays semi-annual interest at a rate of j2=5%. In addition to the interest payments, the city must also make semi-annual contributions to a sinking fund that will be used to repay the bond principal ($4 million) at the end of 20 years. The sinking fund will earn j2=3%. a) Calculate the semi-annual sinking fund deposit to 2 decimals: b) Calculate the total periodic cost of debt to 2 decimals:

A city wishes to finance the cost of a new sports arena through the issue of a $4 million, 20-year bond. The bond pays semi-annual interest at a rate of j2=5%. In addition to the interest payments, the city must also make semi-annual contributions to a sinking fund that will be used to repay the bond principal ($4 million) at the end of 20 years. The sinking fund will earn j2=3%. a) Calculate the semi-annual sinking fund deposit to 2 decimals: b) Calculate the total periodic cost of debt to 2 decimals:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The City of Matlock issues $20,000,000 face value of general obligation bonds for $19,920,000. The bonds will be used for the construction of new streets and sidewalks to make downtown more walkable. The City incurred $100,000 in bond issue costs. What is the amount of expenditures that the City report in its Capital Projects Fund? $108,000 $100,000 $8,000 $0
Can some one please help me to answer the following question. PLEASE AND THANK YOU!!!!
The City of Amarillo is authorized to issue $6,600,000, 3 percent regular serial bonds in 2023 for the construction of a new exit off the anterstate highway within city limits. The bonds mature in equal annual amounts beginning on January 1, 2024, for 10 years and pay nterest on January 1 and July 1. The city is required to use all accrued interest and premiums to service the debt. The funds to pay the nterest will be transferred from the General Fund. The county's fiscal year-end is December 31.
The county of Santa Clara is building a new park. The main financing source will be $1,000,000 bond issue. In addition, the general fund will transfer $100,000 transfer to fund the capital project. Please record the journal entries for the Capital Project Fund & the Government-Wide financial statements. 1. The county has signed a contract with Spectacular Construction to construct the park $1,000,000 2.The $1,000,000 bonds were issued at par 3. Spectacular Construction billed the county of Santa Clara $1,000,000 upon completion of the project 4. The park is completed
Riverbed Co. is building a new music arena at a cost of $5,652,000. It received a down payment of $642,000 from local businesses to support the project, and now needs to borrow $5,010,000 to complete the project. It therefore decides to issue $5,010,000 of 7%, 20- year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal place e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation January 1,2024 Cash Discount on Bonds Payable Bonds Payable Debit 4095316 914684 Credit 5010000 Prepare a bond amortization…
A city engineer has estimated the annual toll revenues from a newly proposed highway construction over 25 years as follows: An = ($2,000,000) (n) (1.05)”—¹, n=1,2,..., 25 To determine the amount of debt financing through bonds, the engineer was asked to present the estimated total present value of toll revenue at an interest rate of 5%. Assuming annual compound- ing, find the present value of the estimated toll revenue.
Voters of Valdez School District, a public school district, approved construction of a new high school at a cost not to exceed $20 million. The district will finance the construction by issuing $20 million of 6 percent term bonds payable in 20 years. Because the site had already been prepared, the school district began construction immediately but the bonds would not be issued for nearly a year. Shortly before the fiscal year-end, the school district borrowed $5 million from a local bank due in one year with interest at 6.2 percent. The note will be repaid from bond proceeds. The school district secured a financing agreement with the bank to convert the debt to a 10-year debt if the school district is unable to sell the bonds by the due date. At year-end, how should the $5 million note be displayed in the government-wide financial statements? A.) Notes payable-long term $5 million; B.) Notes payable-short term $5 million; C.) Nothing D.) None of above
This year Southfork began work on a senior center to hold activities for its growing senior citizen population. It is to be financed by a $5,000,000 bond issue, a $500,000 grant, and a $500,000 General Fund transfer. The following transactions occurred during the current year: The General Fund transferred $500,000 to the Senior Center Capital Projects Fund. A plot of land was purchased for $400,000 in cash. (This cost had not been encumbered.) Preliminary planning and engineering costs of $95,000 were vouchered. (This cost had not been encumbered.) A contract was signed with Sunset Construction Company for the major part of the project on a bid of $4,950,000. The $5,000,000 bonds were issued at par. Temporary investments were purchased at a cost of $3,500,000. A payable was recorded for a $49,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new building. (This cost had not been encumbered.) An invoice in the amount of $1,500,000 was…
A $40 million contract is awarded by a county for construction of a building. Bonds are issued to finance construction, in the amount of $40 million. During the first year, $10 million is paid in cash to contractors for work done. At year-end, the capital projects fund reports the following fund balances: Question 43 options: a) Unavailable: $40 million b) Restricted $20 million, Committed: $10 million c) Restricted: $40 million d) Restricted: $30 million
s
2. Big City provides a defined benefit pension plan for employees of the city water department,an enterprise fund. Assume that the service cost component is $420,000, and interest on thepension liability is $380,000 for the year. Actual returns on plan assets for the year were$300,000 while the projected level of earnings on plan investments was $360,000. Thisdifference is to be amortized over a 5 year period, beginning this year. Finally assume theCity is amortizing a deferred inflow resulting from a change in plan assumptions from a prioryear in the amount of $10,000 per year. Required: Prepare journal entries to record annual pension expense for the enterprise fund.

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