Global Company issued $1,200,000, 10-year bonds for $1,361,042 on January 1, 2012. The stated interest rate on bonds is 10% and the market interest rate is 8%. If the interest is paid annually, then the interest expense for the year 2013 would be nearest to: a. $120,000 b. $107,994 c. $108,883 d. $110,000

Global Company issued $1,200,000, 10-year bonds for $1,361,042 on January 1, 2012. The stated interest rate on bonds is 10% and the market interest rate is 8%. If the interest is paid annually, then the interest expense for the year 2013 would be nearest to: a. $120,000 b. $107,994 c. $108,883 d. $110,000

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

See similar textbooks

Similar questions

Shaw Company issued P5,000,000, 12% bonds on January 1, 2012. The principal of the bonds were paid in series of P1,000,000 annually, together with any accrued interest on the outstanding bonds each December 31, starting December 31, 2012. The prevailing market rate at the time of issuance was 10%. How much is the issuance price of the bonds? Using the information in Problem 4, how much is the interest payment on December 31, 2016? Using the information in Problem 4, how much is the premium amortization on December 31, 2016?
In its December 31, 2018 balance sheet, at what amount should Rio report the carrying value of the bonds?
On February 1, 2009, Alpha Company issued 5,000 of its P1,000 face value bonds at 110 plus accrued interest. Alpha Company paid bond issue cost of P200,000. The bonds were dated November 1, 2008, mature on November 1, 2018, and bear interest at 10% payable semiannually on November 1 and May 1. What is the net amount received by Alpha from the bond issuance?
On January 1, 2016, Mary Co. issued its 10% bonds in the face amount of P 1,500,000 which mature on January 1, 2026. The bonds were issued for P 1,329,000 to yield 12%. Mary uses the effective interest method of amortizing bond discount. Interest is payable semi-annually on July 1 and January 1. For the year ended December 31, 2016 what amount should reported as bonds interest expense?
Alyssa Company issued P 10,000,000 bonds on January 1, 2021. The bonds pay interest annually at 10% on the outstanding bond balance. The face value of the bonds is payable in installments of P 2,000,000 every December 31 starting December 31, 2021. The bonds were sold to yield 14%. Do not round off your present value factors How much cash was paid on December 31, 2021? What is the interest expense for the year 2021? What is the non-current portion of the liability on December 31, 2021? How much cash was paid on December 31, 2022? How much cash was paid on December 31, 2023? What is the current portion of the liability on December 31, 2023? What is the non-current portion of the liability on December 31, 2023? How much cash was paid on December 31, 2024? How much cash was paid on December 31, 2025?
Crane Company issues $26400000, 8.0%, 5-year bonds dated January 1, 2024 on January 1, 2024. The bonds pay interest semiannually on June 30 and December 31. The bonds are issued to yield 7.0%. Given the following present value factors, what are the proceeds from the bond issue? Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods $27487261 $26400000 $27446108 O $27497828 3.5% 0.84197 4.0% 4.51505 0.82193 0.70892 0.67556 4.45182 8.31661 8.11090 7.0% 0.71299 0.50835 4.10020 7.02358 8.0% 0.68058 0.46319 3.99271 6.71008
On November 1, 2006, Mason Company issued P8,000,000 of its 10-year, 8% term bonds dated October 1, 2006. The bonds were sold to yield 10% with total proceeds of P7,000,000 plus accrued interest. Interest is paid every April 1 and October 1. What should Mason report for interest payable in its December 31, 2006 balance sheet?
On June 1, 2023, Numbers Company issued a 3-year, P5,000,000 face value bonds with a stated rate of 10%. The effective interest rate for similar bonds is 12%. Interest on the bonds is payable annually at June 1.The present value of the bond issued by Numbers Company on June 1, 2023 is? 4,759,815.00 4,801,335.38 5,248,660.00 5,000,000.00 The carrying amount/amortized cost of the bond to be reported by Numbers Company on December 31, 2023 is? 4,801,335.38 4,830,992.80 4,910,711.94 5,000,000.00 19.The non-current portion of the bond to be reported by Numbers Corporation on December 31, 2024 is? 0 4,830,992.80 4,877,495.63 4,910,711.94 The non-current portion of the bond to be reported by Numbers Corporation on December 31, 2025 is? 0 4,910,711.94 4,962,796.64 5,000,000.00
On June 1,2024 , Blossom Bottle Company sold $3,720,000 in long-term bonds for $3,262,833. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to 0 decimal places, e.g. 25,000.) Date 61/24 531/25 531/26 531/27 5/31/28 Carrying Amount Debit Interest Expense Credit Bond Discount Bonds $ $ $
On June 30, 2024, LN Bean issued $25 million of its 8% bonds for $23 million. The bonds were priced to yield 10%. Interest is payable semiannually on December 31 and July 1. If the effective interest method is used, how much bond interest expense should the company report for the 6 months ended December 31, 2024? Multiple Choice $1,150.000 $1.207500 $1.293.750
On January 1, 2021, GLITTER Company issued 10% bonds dated January 1, 2021 with a face amount of ₱8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimalplaces for PV factors) REQUIREMENTS: a. How much is the interest expense for the year ended, December 31, 2021?b. How much is the interest expense for the year ended, December 31, 2022? c. What is the carrying amount of the bonds on December 31, 2022?
On June 1, 2024, Ivanhoe Bottle Company sold $3,240,000 in long-term bonds for $2,841,822. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10 %. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective - interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only 531 the first four years. (Round answers to 0 decimal places, e.g. 25,000.) \table[[Date, Credit Cash, Debit Interest Expense,Credit Bond Discount Carrying Amount of Bonds], [6/1/24,,,], [₁₁/25,,,], [¸₁/27,,,], [28 ,,,]] 5 31 5 31

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS