A$ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity.Calculate the purchase price and discount on the bond if the quoted price on the date ofpurchase was 95.2.O a. Purchase Pricer= $ 23, 800 Discount = $ 1, 200O b. Purchase Price = $20, 000 Discount = $ 1, 400%3!O . Purchase Price = $ 25, 000 Discount = $ 1,200%3DO d. Purchase Price = $ 18, 500 Discount = $ 1, 500

Solution:- Bonds are the securities issued by the corporations and governments, under which the…

A $ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity. Calculate the purchase price and discount on the bond if the quoted price on the date of purchase was 95.2. Purchase Price= $ 23, 800 Discount = $ 1, 20Ọ O a. %3D O b. Purchase Price = $ 20, 000 Discount = $ 1, 400 %3D O c. Purchase Price = $ 25, 000 Discount = $ 1,200 %3D O d. Purchase Price = $ 18, 500 Discount = $ 1, 500

A $ 25, 000, 5% bond payable semi-annually is purchased seven years before maturity. Calculate the purchase price and discount on the bond if the quoted price on the date of purchase was 95.2. Purchase Price= $ 23, 800 Discount = $ 1, 20Ọ O a. %3D O b. Purchase Price = $ 20, 000 Discount = $ 1, 400 %3D O c. Purchase Price = $ 25, 000 Discount = $ 1,200 %3D O d. Purchase Price = $ 18, 500 Discount = $ 1, 500

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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5 On January 1, Ruiz Company issued bonds as follows: Face Value: Number of Years: Stated Interest Rate: Interest payments per year 7 B 9 0 1 2 AWN IC $500,000 a) Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the botto this worksheet). Note: Rounding is not required. 15 7% 2 Annual Market Rate Semiannual Interest Payment: PV of Face Value: +PV of Interest Payments: Bond Selling Price: Annual Market Rate Semiannual Interest Payment: PV of Face Value: +PV of Interest Payments: = Bond Selling Price: 9% $17,500 133,500.01 285,055.55 418,555.56 6.00% $17,500 205,993.38 5343,007.72 $549,001.10 +
Marwick Corporation issues 12%, 5-year bonds with a par value of $1,230,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%. What is the bond's issue (selling) price, assuming the following Present Value factors: number of periods (n)- 5 10 5 10 Multiple Choice Present Value of an interest rate Annuity (series of $1,019,244 $1,324,958 $1,230,000 $660,139 $1,799,861 12% 10% 5% payments) 3.6048 7.3601 3.7908 7.7217 Present value of 1 (single sum) 0.5674 0.5584 0.6209 0.6139
Allegiant issues 5%, 20-year bonds with a par value of $2,000,000 and semiannual interest payments. In each separate situation, determine whether the bond is issued at par value, at a discount, or at a premium. Situation 1. Market rate for the bond is 4%. 2. Market rate for the bond is 5%. 3. Market rate for the bond is 6%. Bond issued
2. Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. An investor would be willing to pay an amount ? the face value for this bond. A. More than B. Less than C. Equal to The bonds were issued at? A. Par B. A premium C. A discount
bond contract rate =7% semi- anual bond -$10,000 bond market =6% semi annual bond life = 10 years 1) find the selling price of this bond 2) will it be sold at a discount or premium 3) do the journal entry for the issuance 4) calculate the discount/premium authorization per period (use the slightline method ) 5) do the entry for the payment of cash interest period 6) do the entry for the amortization of the discount /premium per period 7)find total interest expense per period 8) show the balance sheet presentation of the bond after two periods have elapsed
A $1,000 bond quoted at 98 could be purchased or sold for a. $980. b. $1,098. c. $1,000. Od. between $1,000 and $1,098, depending on the maturity date of the bond.
A 15-year bond issue of 4 comma 900 comma 000 and bearing interest at 3.5% payable annually is sold to yield 3.1% compounded semi dash annually. What is the issue price of the bonds?
Determine the market price of a $485,000, 10-year, 8% (pays interest semiannually) bond issue sold to yield an effective rate of 10%.
a 29000 bond with interest at 5.1% payable semi annually and redeemable ar par is bought two years before maturity to yield 7.8% compunded semi annually. complete the premium or discount and the purchase price and construct the appropriate bond schedule
Determine the price of a $1.9 million bond issue under each of the following independent assumptions: Maturity 10 years, interest paid annually, stated rate 6%, effective (market) rate 9%. Maturity 10 years, interest paid semiannually, stated rate 6%, effective (market) rate 9%. Maturity 10 years, interest paid semiannually, stated rate 9%, effective (market) rate 6%. Maturity 20 years, interest paid semiannually, stated rate 9%, effective (market) rate 6%. Maturity 20 years, interest paid semiannually, stated rate 9%, effective (market) rate 9%.
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