A corporation sold an issue of 20-year bonds, having a total face value of P10M for P 9.5M. The bonds bear interest at 16% payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12% compounded semiannually. Compute the annual cost for interest and redemption of these bonds

Q: Ques 6) What are the two methods of calculating the percentage annual return earned by the owner of…

A: Discount yield is the expected annual percentage rate of return of return earned on a bond when it…

Q: What is the amount of bond interest expense for the first year?

A: Solution: Bond interest expense for first year = Interest expense for first semiannual period +…

Q: Explain how each of the columns in an amortization schedule is calculated, assuming the bonds are…

A: Amortization is the process of converting long term loans or bonds into series of periodic payment.…

Q: The date on which the principal amount is repaid to the bond holder is known as the?

A: One of the most common sources of arranging the finance used by the business entity is to issue…

Q: The discount on a bond payable becomesa. additional interest expense in the year the bonds are…

A: Bond payable: It can be defined as a debt taken by the company for a longer period and reflects the…

Q: Describe the repayment process for both a term loan and ab

A: Term loan and bonds are two different types of raising money.

Q: Define bonds payable.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: (a) What are long-term liabilities? Give three examples. (b) What is a bond?

A: Liability seems to be a debt owing by one firm to an individual or company who is not the owner of…

Q: Which one of the below most likely respresents the periodic receipts of interest? O the coupon rate.…

A: Periodic payments means fixed amount paid regularly to the investor. Example interest amount on…

Q: Interest expense on the income statement: A) B) C) D) is net of any bond premium amortization will…

A: Interest expense on the income statement:Answer: (A) is net of any bond premium amortization

Q: Indicate how to present and analyze long-term debt.

A: Long-term debt of a company includes the amount of money which is borrowed by the company from…

Q: Define the term Bonds Issued at a Premium.

A: Bonds Bonds are units of a company's debt that are issued by the company and packaged as tradable…

Q: 4. What best describes the discount on bonds payable account? a.An asset b.A liability c.An expense…

A: Discount on bonds payable account is used when a bond is issued at discount.

Q: 10. The bond interest expense reflected on the income statement should reflect an amount based on…

A: The bond interest expense reflected on the income statement should reflect on amount based on the…

Q: The PFRS allows for the straight-line amortization of discount or premium on bonds due

A: Introduction: The PFRS provides for the amortization of discount or premium on bonds payable in a…

Q: Explain Bonds Issued Between Interest Dates.

A: Bond: It can be defined as the instrument that carries a fixed rate of income and represents the…

Q: When accounting for a bond whose interest is included in the face amount, the account Discount in…

A: Discount in Bond payable Issue of bond which can be incurred in between face value, discount and…

Q: When interest is calculated on the principal amount borrowed is known as what A. Annuity B. Simple…

A: The interest is paid by the borrower to the lender in exchange for money provided to the borrower.…

Q: What formula is used to compute the amount of interest expense on Bonds Payable? Carrying value of…

A: To calculate disbursement on these bonds, we have a tendency to take the carrying quantity of the…

Q: When does a discount on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Describe the accouting for bonds payaable, including bonds issued at face amount , bonds issued at a…

A: A bond payable is a promise to pay series of amount as interest overtime and fixed amount at…

Q: what is the principal amount repaid at the maturity of a bond is called?

A: Bond is a debt instrument which is issued by corporates or governments to raise funds for any…

Q: What is the effective interest method of amortization? a. It is an amortization method that…

A: Solution: the effective interest method of amortization is that "It is an amortization method that…

Q: When bonds are acquired between interest payment dates, the price paid for the bond is:         a.…

A: The bonds are considered as long-term liabilities for the organizations and interest accrued are…

Q: Identify the term being referred to: A type of bond that requires a portion of the face amount be…

A: The type of bond that pays off a portion of face value periodically includes a proportionate payment…

Q: the effective interest rate method of amortizing bonds allocates the same amount of interest expense…

A: Solution- The preferred method for amortizing (or gradually writing off) a discounted bond is the…

Q: The interest rate stated on the bond is known as: (a) effective rate. (c) nominal rate. (b) market…

A: solution : The interest rate stated on the bond is known as: Correct answer is option c) nominal…