Exercise 14-2 (Algo) Determine the price of bonds in various situations [LO14-2] Determine the price of a $1.7 million bond issue under each of the following independent assumptions: 1. Maturity 15 years, interest paid annually, stated rate 10%, effective (market) rate 12%. 2. Maturity 15 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%. 3. Maturity 15 years, interest paid semiannually, stated rate 12 %, effective (market) rate 10%. 4. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%. 5. Maturity 10 years, interest paid semiannually, stated rate 12% , effective (market) rate 12%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1.) Complete this question by entering your answers in the tabs below.. Required 1 Required 2 Required 3 Required 41 Maturity 15 years, Interest paid semiannually, stated rate 12%, effective (market) rate 10%. Note: Round your answer to the nearest whole dollar. Required 5

Exercise 14-2 (Algo) Determine the price of bonds in various situations [LO14-2] Determine the price of a $1.7 million bond issue under each of the following independent assumptions: 1. Maturity 15 years, interest paid annually, stated rate 10%, effective (market) rate 12%. 2. Maturity 15 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%. 3. Maturity 15 years, interest paid semiannually, stated rate 12 %, effective (market) rate 10%. 4. Maturity 10 years, interest paid semiannually, stated rate 12%, effective (market) rate 10%. 5. Maturity 10 years, interest paid semiannually, stated rate 12% , effective (market) rate 12%. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1.) Complete this question by entering your answers in the tabs below.. Required 1 Required 2 Required 3 Required 41 Maturity 15 years, Interest paid semiannually, stated rate 12%, effective (market) rate 10%. Note: Round your answer to the nearest whole dollar. Required 5

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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Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
Required Information P10-10 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium LO10-5 [The following information applies to the questions displayed below.] On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Interest $ 1,661 ? ? 1,640 Date January 1, Year 1 End of Year 1 End of Year 2 End of Year 3 End of Year 4 -10-10 Part 3 Cash $ 1,792 ? ? Cash received ? Amortization $ 131 ? 145 ? Balance 32,566 32,435 32,297 ? 32,000 $ . How much cash was received on the day the bonds were issued (sold)?
Please answer subparts 2b,3 ASAP. On January 1, 2021, Instaform, Inc., issued 12% bonds with a face amount of $75 million, dated January 1. The bonds mature in 2040 (20 years). The market yield for bonds of similar risk and maturity is 14%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 2-b. Assume the market rate was 11%. 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.
1->> O O O Baxter's Hamburgers issued 6%, 10-year bonds payable at 95 on December 31, 2024. At December 31, 2026, Baxder reported the bonds payable as follows: (Click the icon to view the bonds payable.) Requirement 1. Answer the following questions about Baxter's bonds payable: a. What is the maturity value of the bonds? b. What is the carrying amount of the bonds at December 31, 2026? c. What is the semiannual cash interest payment on the bonds? d. How much interest expense should the company record each year? Requirement 2. Record the June 30, 2026, semiannual interest payment and amortization of discount. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date 2026 Jun. 30 Accounts and Explanation Debit Baxter's pays semiannual interest each June 30 and December 31. (Assume bonds payable are amortized using the straight-line amortization method.) Read the requirements. Credit D
Q#9 On June 30, 2021, Singleton Computers issued 5% stated rate bonds with a face amount of $280 million. The bonds mature on June 30, 2036 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Required:1. Determine the price of the bonds on June 30, 2021.2. Calculate the interest expense Singleton reports in 2021 for these bonds using the effective interest method. 1. Table values are based on: n = i = Cash Flow Amount Present Value Interest Principal Price of bonds
The 12-year $1,000 par bonds of Vail Inc. pay 8 percent interest. The market's required yield to maturity on a comparable-risk bond is 12 percent. The current market price for the bond is $850. a. Determine the yield to maturity. b. What is the value of the bonds to you given the yield to maturity on a comparable-risk bond? c. Should you purchase the bond at the current market price? Question content area bottom Part 1 a. What is your yield to maturity on the Vail bonds given the current market price of the bonds? enter your response here% (Round to two decimal places.)
¥1 billion, 7%, 10-year bonds are issued at face value. Interest will be paid semi-annually. When calculating the market price of the bond, the present value of O ¥1 billion received in 10 periods must be calculated. O ¥70000000 received for 10 periods must be calculated. ¥35000000 received for 10 periods must be calculated. O ¥1 billion received in 20 periods must be calculated.
a. b. C. Problem 9.4: R & J, Inc. issues a 10-year $1,000 bond that pays $28.50 semi-annually. The market price for the bond is $975. The market's required yield to maturity on a comparable-risk bond is 6 percent. a. What is the value of the bond to you?. b. What happens to the value if the market's yield to maturity on a comparable-risk bond (i) increases to 8 percent or (ii) decreases to 4 percent? c. Under which of the circumstances in parts a & b should you purchase the bond? Years Par (FV) PMT Nper m Comparable risk (Rate) Bond value (PV) Comparable risk (Rate) Bond value (PV) Comparable risk (Rate) Bond value (PV)
Determine the price of a $1.3 million bond issue under each of the following independent assumptions: 1. Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. 2. Maturity 10 years, interest paid semiannually, stated rate 8%, effective (market) rate 10%. 3. Maturity 10 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%. 4. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 8%. 5. Maturity 20 years, interest paid semiannually, stated rate 10%, effective (market) rate 10%. Note: Use tables, Excel, or a financial calculator. (FV of S1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1.) Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 2 Required 4 Required 5 Maturity 10 years, interest paid annually, stated rate 8%, effective (market) rate 10%. Note: Round your answer to the nearest whole dollar. Price of bonds Required 2 > Next
! Required information Problem 9-7B Calculate the issue price of a bond and prepare amortization schedules (LO9-5, 9-7) [The following information applies to the questions displayed below.] Christmas Anytime issues $830,000 of 6% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: Problem 9-7B Part 2 2. The market interest rate is 7% and the bonds issue at a discount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Round your answers to nearest whole dollar.) Issue price Date $ Cash Paid 830,000 Interest Change in Expense Carrying Value 01/01/2021 06/30/2021 $ 29,050 $ 29,050 12/31/2021 29,050 Carrying Value
RCISES i S Exercise 14-17A (Algo) Computing bond interest and price; recording bond issuance LO C2 Brin Company issues bonds with a par value of $700,000. The bonds mature in 6 years and pay 6% annual interest in semiannual payments. The annual market rate for the bonds is 8%. (Table B.1 Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. 1. Compute the price of the bonds as of their issue date. 2. Prepare the journal entry to record the bonds' issuance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the price of the bonds as of their issue date. Note: Round all table values to 4 decimal places, and use the rounded table values in calculations. Round intermediate calculations to the nearest dollar amount. Table Values are Based on: Cash Flow Par (maturity) value Interest (annuity) Price of bonds n = i= Table Value Amount Required 1 Present Value $ Saved Required 2 > 0
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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