Exercise 7-19 (Algo) Bonds payable-various issues LO 7-8 Reynolds Company issued $71 million face amount of 4.25% bonds when market interest rates were 4.13% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds? Note: Enter your answer in dollars, not millions of dollars. b. Were the bonds issued at a premium or discount? c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? a. Annual interest payment b. Bonds issued c. Annual interest expense will be

Exercise 7-19 (Algo) Bonds payable-various issues LO 7-8 Reynolds Company issued $71 million face amount of 4.25% bonds when market interest rates were 4.13% for bonds of similar risk and other characteristics. Required: a. How much interest will be paid annually on these bonds? Note: Enter your answer in dollars, not millions of dollars. b. Were the bonds issued at a premium or discount? c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? a. Annual interest payment b. Bonds issued c. Annual interest expense will be

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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Question 4 1 Computing Bond Issue Price Abbington Inc. issues $140,000 of 9% bonds that pay interest semiannually and mature in 10 years. Compute the bond issue price assuming that the prevailing market rate of interest is: Note: Round your answer to the nearest whole dollar. a. 8% per year compounded semiannually. $0 b. 10% per year compounded semiannually. $0
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! 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
9
Exercise 10-5 (Algo) Straight-Line: Recording bond issuance and discount amortization LO P2 Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $90,000 and semiannual interest payments. Semiannual Period-End (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Unamortized Discount $ 6,533 5,716 4,899 Carrying Value $ 83,467 84,284 85,101 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list Journal entry worksheet 1 2 3 Record the issuance of the bonds on January 1. Note: Enter debits before credits. Date January 01 General Journal Debit Credit
Exercise 14-5 (Algo) Straight-Line: Recording bond issuance and discount amortization LO P2 Paulson Company issues 8%, four-year bonds, on January 1 of this year, with a par value of $103,000 and semiannual interest payments. Semiannual Period-End (0) January 1, issuance (1) June 30, first payment (2) December 31, second payment Use the above straight-line bond amortization table and prepare journal entries for the following. Unamortized Discount $ 6,793 (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. Carrying Value $ 96,207 97,056 97,905 5,944 5,095
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A4
Exercise 10-3 (Algo) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises Issues bonds that have a $1,600,000 par value, mature in 20 years, and pay 8% Interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much Interest will Boston pay (in cash) to the bondholders every six months? 2. Prepare Journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second Interest payment on December 31. 3. Prepare the journal entry for Issuance assuming the bonds are issued at (a) 98 and (b) 102. Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much interest will Boston pay (in cash) to the bondholders every six months? Semiannual Cash Interest Payment Par (maturity) Value Required 3 X Semiannual Rate Required 1 Required 2 >
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