### Elizabeth Brown Inc. - Debt Issuance OverviewElizabeth Brown Inc. has issued three types of debt on January 1, 2025, marking the beginning of the company's fiscal year. The details of the bonds are summarized below:#### Types of Bonds Issued- **Unsecured Bonds** - Amount: $10 million - Term: 10 years - Interest: 13%, payable quarterly - Pricing: Yielded 12.00%- **Zero-Coupon Bonds** - Amount: $27 million par - Term: 10 years - Pricing: Yielded 12.00% per year- **Mortgage Bonds** - Amount: $15 million - Term: 10 years - Interest: 11.00%, payable annually - Pricing: Yielded 12.00%### Instructions for Schedule PreparationPrepare a schedule that identifies the following items for each bond category:1. **Maturity Value:** The total face value of the bond at the end of its term.2. **Number of Interest Periods:** The frequency of interest application over the life of the bond.3. **Stated Rate per Interest Period:** The nominal interest rate applied during each period.4. **Effective-Interest Rate per Interest Period:** The actual interest rate, taking compounding into account.5. **Payment Amount per Period:** The dollar amount of interest or principal payments made periodically.6. **Present Value of Bonds at Date of Issue:** The calculated current value of future bond payments.**Rounding Guidelines:**- Present value calculations should be rounded to 5 decimal places (e.g., 1.25124).- Round stated and effective rate per period to 2 decimal places (e.g., 10.25%).- Round other numerical answers to 0 decimal places (e.g., 58,971).### Bonds Data Table#### Unsecured Bonds- **Maturity Value:** - **Number of Interest Periods:** - **Stated Rate per Period:** - **Effective Rate per Period:** - **Payment Amount per Period:** - **Present Value:** #### Zero-Coupon Bonds- **Maturity Value:** - **Number of Interest Periods:** - **Stated Rate per Period:** - **Effective Rate per Period:** - **Payment Amount per Period:** - **Present

Here, Unsecured BondsZero Coupon BondsMortgage BondsTime To Maturity in years101010Coupon Rate13%0%11%Yield to Maturity12%12%12%Schedule is as follows:Workings:Calculations:1) Maturity Value $ 10,000,000.00 $ 27,000,000.00 $ 15,000,000.002) Number of Interest Period 40 10 103) Stated Rate per Period3.25%0.00%11.00%4) Effective Rate per Period3.00%12.00%12.00%5) Payment Amount per Period $325,000 $ - $1,650,0006) Present Value $10,577,869 $8,693,277$14,152,467

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Elizabeth Brown Inc. has issued three types of debt on January 1, 2025, the start of the company's fiscal year. Click here to view factor tables. (a) $10 million, 10-year, 13% unsecured bonds, interest payable quarterly. Bonds were priced to yield 12.00%. (b) $27 million par of 10-year, zero-coupon bonds at a price to yield 12.00% per year. (c) $15 million, 10-year, 11.00% mortgage bonds, interest payable annually to yield 12.00%. Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective-interest rate per each interest period, (5) payment amount per period, and (6) present value of bonds at date of issue. (Round present value factor calculations to 5 decimal places, e.g. 1.25124. Round stated and effective rate per period to 2 decimal places, e.g. 10.25% and other answers to O decimal places, e.g. 58,971.) (1) (3) (4) (5) (6) Maturity value Number of interest periods Stated rate per period Effective rate per period Payment amount per period Present value $ 6/1 $ Unsecured Bonds || % % $ $ Zero-Coupon Bonds ]][[[[ % % 69 $ +A $ Mortgage Bonds |||||| % %

Elizabeth Brown Inc. has issued three types of debt on January 1, 2025, the start of the company's fiscal year. Click here to view factor tables. (a) $10 million, 10-year, 13% unsecured bonds, interest payable quarterly. Bonds were priced to yield 12.00%. (b) $27 million par of 10-year, zero-coupon bonds at a price to yield 12.00% per year. (c) $15 million, 10-year, 11.00% mortgage bonds, interest payable annually to yield 12.00%. Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective-interest rate per each interest period, (5) payment amount per period, and (6) present value of bonds at date of issue. (Round present value factor calculations to 5 decimal places, e.g. 1.25124. Round stated and effective rate per period to 2 decimal places, e.g. 10.25% and other answers to O decimal places, e.g. 58,971.) (1) (3) (4) (5) (6) Maturity value Number of interest periods Stated rate per period Effective rate per period Payment amount per period Present value $ 6/1 $ Unsecured Bonds || % % $ $ Zero-Coupon Bonds ]][[[[ % % 69 $ +A $ Mortgage Bonds |||||| % %

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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On March 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $141.50 million (plus accrued interest) to yield 12%. • The price if issued on January 1 would have been $138.75 million. • Interest is paid semiannually on June 30 and December 31. ● Baddour's fiscal year ends September 30. ● Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024? Note: Enter your answers in whole dollars. Negative amounts should be indicated by a minus sign. Balance sheet: Bonds payable (net) Financing activities Interest payable Income statement: Interest expense Statement of cash flows: $ 160,000,000 (18,500,000) 141,500,000 12,735,000
On January 1, 2012, Instaform Company issued 10% bonds with a principal amount of $50 million, dated January 1. The bonds mature in 2031 (20 years). The market yield for bonds of similar risk and maturity is 12% . Interest is paid semiannually. Required: 1. Determine the price of the bonds on January 1, 2012, and prepare the journal entry to record their issuance by Instaform 2. Assume the market rate was 9%. Determine the price of the bonds on January 1, 2012, and prepare the journal entry to record their issuance by Instaform. 3. Assume Broadcourt Electronics purchased the entire issoe in a private placement of the bonds. Using the data in requirement 2. prepare the journal entry to recced their purchase by Broadcourt .
Bombay Corporation issued 8% bonds on January 1, 2021, with a face value of $700,000, the market yield for bonds of similar risk and maturity was 10%. The bonds mature December 2023 (3 years). Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds on January 31, 2021. 2. Prepare the journal entry to record their issuance by Bombay on January 1, 2021. (See the below template) 3. Prepare an amortization schedule that shows the effective interest rate each period. 4. Prepare the journal entry to record interest on June 30, 2022. Date Cash Payment Effective Interest Increase in balance. Discount Reduction Outstanding Balan
Problem Tower Inc. issues $40,000, 10%, 10-year bonds at January 1, 2020. Interest is paid semi- annually on June 30 and December 31. On the date of issuance, the bonds sold for 113.5 when the market rate was 8%. 1.) Compute the price of the bonds on their issue date. Round to the whole dollars.
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On January 1, 2022, P Corp. issued eight-year, 3% bonds with a face value of $400,000, with interest payable semi- annually on June 30 and December 31. The bonds were sold to yield 4%. Table values are: Present value of 1 for 8 periods at 3% .789 Present value of 1 for 8 periods at 4% 731 Present value of 1 for 16 periods at 1.5% 788 Present value of 1 for 16 periods at 2% .728 Present value of annuity for 8 periods at 3% Present value of annuity for 8 periods at 2% 7.020 7.325 Present value of annuity for 16 periods at 1.5% 14.131 Present value of annuity for 16 periods at 2% 13.578 What is the issue price of the bond?
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On January 1, 2024, Anne Teak Furniture issued $100,000 of 12% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. The annual market rate for bonds of similar risk and maturity is 14%. What was the issue price of the bonds? 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) Multiple Choice $89,460 $120,942 $95,460 $94,029
Pronghorn Inc. has issued three types of debt on January 1, 2020, the start of the company’s fiscal year. (a) $11 million, 12-year, 15% unsecured bonds, interest payable quarterly. Bonds were priced to yield 10%. (b) $26 million par of 12-year, zero-coupon bonds at a price to yield 10% per year. (c) $20 million, 12-year, 8% mortgage bonds, interest payable annually to yield 10%. Prepare a schedule that identifies the following items for each bond: (1) maturity value, (2) number of interest periods over life of bond, (3) stated rate per each interest period, (4) effective-interest rate per each interest period, (5) payment amount per period, and (6) present value of bonds at date of issue. (Round stated and effective rate per period to 2 decimal places, e.g. 10.25%. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) (There is a picture bellow of what I have started but I am confused if it is…
Coronado Inc. issued $920,000 of 10%, 10-year bonds on June 30, 2025, for $814,472. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Coronado uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2025. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded
On January 1, 2024, Cool Universe issued 10% bonds dated January 1, 2024, with a face amount of $20.1 million. The bonds mature in 2033 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. 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 January 1, 2024. 2. Prepare the journal entry to record the bond issuance by Cool on January 1, 2024. 3. Prepare the journal entry to record interest on June 30, 2024, using the straight-line method. 4. Prepare the journal entry to record interest on December 31, 2024, using the straight-line method. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Check n Determine the price of the bonds on January 1, 2024. Note: Enter your answers in whole dollars not in millions (l.e., 1,000,000 not 1). Round your intermediate…
On January 1, 2016, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2035 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually. Required: 1. Determine the price of the bonds at January 1, 2016, and prepare the journal entry to record their issuance by Instaform. 2. Assume the market rate was 9%. Determine the price of the bonds at January 1, 2016, and prepare the journal entry to record their issuance by Instaform. 3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.

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