BOND PRICING #2 for Borrowing Money IncBorrowing Money Inc (BMI) issues a bond on January 1, 2021 with a face valuc of $400,000.The bond has an 7 year maturity date and requires SEMI ANNUAL interest paymerits. The bond'sstated interest rate is 3% and the current market interest rate is 2%.Hint: remember to set your expectationsPV tables will be needed. Do not round your PVIF, but you may round answers to whole dollars.Prepare the journal entry (in proper form) at issuance of this bond for BMI. Include your journal forgrading on your PDF upload.Your multiple step calculations must also be shownTo get a preliminary idea of how you did you may enter your calculated amount for cash received atIssuance Regarding the bond issued by BMI abovePrepare (in good form) the Semi Annual joumal entry needed to be recorded by BMI for the cashpayment required.Upload your joumal and calculations on your PDF.What is the ANNUAL interest expense related to this bond?

Bond is borrowing security that is issued by the company to raise funds from the market by making an…

Answered: BOND PRICING #2 for Borrowing Money Inc…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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COPY PASTE WILL DOWNVOTE Swoot, Inc issued serial bonds on January 1, 2020 that mature 5 years later on December 31, 2024. There are 2,500 bond issued with a face value per bond of $1,000. The stated rate is 8% and the market rate is 9%. In the box below, provide the journal entry for December 31, 2022 (round all numbers to the whole dollar using 5/4 rounding and no commas, enter debits as positive number and enter credits in brackets "()").
QUESTION 1 UMass Boston issued bonds to pay for the construction of the residencce halls. One of their bond issues pays a coupon of $43.76 twice a year. What is the coupon rate? Answer as a percent. QUESTION 2 What is the coupon rate for the bond? Assume semi-annual payments. Answer as a percent! Coupon Rate Bond City of Somerville ? Yield 4.4% Price $990.90 t 18
4 A $1,000.00, 8.0% Semi-Annual Bond matures on October 1, 2036. The Bond may be called at 102.5 on April 1, 2030. Round ALL final answers to the nearest penny (cent), NO dollar signs, USE commas where needed What is the Value of the bond on April 1, 2024, when the market rate is 7.0% if: The bond is held to maturity and redeemed at par? The bond is called on April 1, 2030 and redeemed at the call value?
Yield to maturity Peter, an intern at Elite Investments, is asked by his supervisor to perform simple analysis of bonds in the bond market. He wants to calculate the theoretical values of the following bonds. Using the information provided below, calculate the intrinsic value of each $1,000-par-value bond The value of bond A is S Bond A B (Round to two decimal places.) Coupon rate 6% 8 Coupon frequency semiannually annually Time to maturity 5 years 9 Yield to maturity 6% 7
Quiz Saved Help Save & Exit Submit Check my work Calculate the purchase price of the $1,000 face value bond using the information given below. (Do not round the intermediate calculations. Round your final answer to 2 decimal places.) Maturity date Dec 15, 2022 Market rate (%) 7.7 Issue date Purchase date Coupon rate (%) 5.65 :00 Dec 15, 1987 June 15, 2ee5 Assume that • Bond interest is paid semiannually. • The bond was originally issued at its face value. Bonds are redeemed at their face value at maturity • Market rates of return are compounded semiannually. Bond price $4
Create an essay using the following information: Assume you are evaluating whether to purchase the following $1,000 face value bonds: Co. X bond with a 6% coupon rate that matures in 9 years. Co. Y bond with an 11% coupon rate that matures in 7 years. Also, you may wish to review https://t.ly/wJqNM and https://t.ly/2EX2k about corporate junk (junk bonds). Given the scenario and information about junk bonds, address the following: Value these bonds assuming a market rate on similar risk bonds is 7% and interest is paid annually. Value these bonds assuming a market rate on similar risk bonds is 7% and interest is paid semi-annually. Value these bonds assuming a market rate on similar risk bonds is 12% and interest is paid annually. Assuming both bonds were issued at the same time, why would the Co. Y bond pay a higher coupon rate?
Excel Online Structured Activity: Bond valuation You are considering a 30-year, $1,000 par value bond. Its coupon rate is 8%, and interest is paid semiannually. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. Open spreadsheet If you require an "effective" annual interest rate (not a nominal rate) of 10.38%, how much should you be willing to pay for the bond? Do not round intermediate steps. Round your answer to the nearest cent. $ Check My Work Reset Problem
Bond valuation-Semiannual interest Calculate the value of each of the bonds shown in the following table, all of which pay interest semiannually. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Bond A B C The value of bond A is $ Par Value $500 500 100 Coupon interest rate 9% 12 13 (Round to the nearest cent.) Years to maturity 10 15 5 Required stated annual return 10% 10 16
eBook You read in The Wall Street Journal that 30-day T-bills are currently yielding 4%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: · Inflation premium = 3.25% · Liquidity premium = 0.7% • Maturity risk premium = 1.85% · Default risk premium = 2.45% On the basis of these data, what is the real risk-free rate of return? Round your answer to two decimal places. %
Need help with C Approximate yield to maturity An investor must choose between two bonds: Bond A pays $90 annual interest and has a market value of $815. It has 15 years to maturity. Bond B pays $81 annual interest and has a market value of $700. It has eight years to maturity. Assume the par value of the bonds is $1,000. a. Compute the current yield on both bonds. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) Current Yield Bond A11.04% Bond B11.57% c. A drawback of current yield is that it does not consider the total life of the bond. For example, the approximate yield to maturity on Bond A is 11.51 percent. What is the approximate yield to maturity on Bond B? The exact yield to maturity? (Use the approximation formula to compute the approximate yield to maturity and use the calculator method to compute the exact yield to maturity. Do not round intermediate calculations. Input your answers as a percent rounded to 2…

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