Hillside Excursions issues bonds due in 15 years with a stated interest rate of 11% and a face value of $150,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. Using a financial calculator or Excel, calculate the issue price of the bonds.

Hillside Excursions issues bonds due in 15 years with a stated interest rate of 11% and a face value of $150,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. Using a financial calculator or Excel, calculate the issue price of the bonds.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

See similar textbooks

Related questions

Q: You are called in as a financial analyst to appraise the bonds of Olsen’s Clothing Stores. The…

A: Bonds are fixed-income assets that serve as a representation of investor loans to borrowers…

Q: Compute what your bonds are worth. Round all calculations to 2 decimals.

A: Bonds are a kind of financial instrument issued for raising cash by the entities for a perspective…

Q: Ocean Adventures issues bonds due in 10 years with a stated interest rate of 12% and a face value of…

A: Coupon rate = 12% (Semi-annual payment)Face value = $490,000Bond period = 10 yearsBond yield = 13%

Q: North Co. Issued bonds on July 1, 2018 worth $100,000 with a coupon rate of 10% and an effective…

A: Bond is an investment security which is issued to arrange the fund by large firms and government…

Q: Your company issues $3,500,000 bonds at 7% interest with annual interest payments. Bonds have a…

A: A bond is a loan the investors give to the company or a business. The company repays the bond with…

Q: Larry's Bank buys 58 bonds of the Puppet House Corp. through a broker. The bonds pay 10 percent…

A: Part A.Characteristics of the bond:Payment frequency = Semi annual, Period = Half year.Periodic…

Q: On January 1, 2020, Everly Bottle Company sold $4,000,000 in long-term bonds. The bonds will mature…

A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…

Q: Stealth Fitness Center issues 9%, 7-year bonds with a face amount of $300,000. The market interest…

A: BOND Bond is a Financial Securities which is Generally Issued by the Corporation's, Government…

Q: Take me to the text A company issued $1,140,000 worth of 8-year bonds with a 3% interest rate.…

A: Par value $1,140,000.00Maturity period8Coupon rate3%Coupon payment per year $34,200.00

Q: Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the…

A: Bonds Payable: Bonds Payable are the financial instruments that are issued with a promise or…

Q: Seaside issues a bond that has a stated interest rate of 12%, face amount of $40,000, and is due in…

Q: SpaceX issues a bond with a stated interest rate of 9%, face value of $185,000, and due in 6 years.…

A: The bonds are issued at a premium when the coupon rate offered by the bond is higher than the…

Q: Novak Corporation issues $570,000 of 9% bonds that are due in 8 years and pay interest…

A: Issue price of bond. Interest x PVAF (r,n) + Principal x PVAF (r,n) Where, r = 8%/2 = 4% or 0.04 n =…

Q: Mind Explorers issues bonds with a stated interest rate of 7%, face value of $220,000, and due in 10…

A: Current Price of Bond: The current interest rate is compared to the interest rate that is indicated…

Q: Ocean Adventures issues bonds due in 10 years with a stated interest rate of 10% and a face value of…

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: You are called Iin as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The…

A: Bond valuation is done through the concepts of prestige value. The current value of the bond is the…

Q: Ocean Adventures issues bonds due in 10 years with a stated interest rate of 6% and a face value of…

A: Issue price of bond is the present value of future cash inflows PV = PV of face value + PV of…

Q: The face value of a bond is $71,000, its stated rate is 7%, and the term of the bond is five years.…

A: A bond is a fixed-income security that pays regular fixed periodic payments to the bond holder and…

Q: Roman Destinations issues bonds due in 10 years with a stated interest rate of 5% and a face value…

A: The bonds are the financial instruments of the business that are used to raise the money from the…

Q: The company issues 10.0%, 10-year bonds with a total face amount of $1,000,000. The market interest…

A: A bond is an instrument offered in a debt market that pays the investor a regular set of interest…

Q: Mountain Excursions issues bonds due in 15 years with a stated interest rate of 11% and a face value…

A: Bonds are fixed-income securities that simulate loans made by investors to borrowers. In a contract…

Q: Hartford Research issues bonds dated January 1 that pay interest semiannually on June 30 and…

A: Bonds A security which is acquired by the investors and sold by the company in the market are…

Q: Pharoah Corporation issues $420,000 of 11% bonds that are due in 11 years and pay interest…

A: Current Bond Price is that amount which is calculate with the help of present value of future…

Q: Brin Company issues bonds with a par value of $590,000. The bonds mature in 5 years and pay 9%…

A: The objective of the question is to calculate the issue price of the bonds and prepare the journal…

Q: You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The…

A: Compound = Semiannually = 2Face Value = fv = $1000Coupon Rate = c = 9 / 2 = 4.5%Yield to Maturity =…

Q: For each of the following three examples, provide the journal entry that the company would make on…

A: Issue price of the bonds = Present value of principal + Present value of interest payments = (Face…

Q: On January 1, 2024, Tableau Company issues $20 million of 9% bonds, due in six years, with interest…

A: Determination of whether bonds have been issued at face value, premium, or discount:If the issue…

Q: Happy Hollow, LLC issues Ș50,000 bonds at 20% interest with quarterly interest payments. Bonds have…

A: Total Interest Received=Face Value×Interest Rate×Time

Q: San Miguel Company's 18-year, $1,000 par value bonds pay 6.5 percent interest annually. The market…

A: A bond is a debt instrument that allows the issuer to raise funds from the public. The bond's issuer…

Q: Brin Company issues bonds with a par value of $590,000. The bonds mature in 5 years and pay 9%…

A: Bond valuation is a method that is used to determine the theoretical value that should be assigned…

Q: Mountain Excursions issues bonds due in 10 years with a stated interest rate of 7% and a face value…

A: n =10*2 n = 20 i = 8%/2 i = 4% Stated interest rate = 7%/2 Stated interest rate = 3.5%

Q: Seaside issues a bond with a stated interest rate of 12%, the face value of $40,000, and due in 8…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.

Q: Buchanan Corporation issues $500,000 of 11% bonds that are due in 10 years and pay interest…

A: The issue price of the bonds is the initial selling price or the amount at which a company or entity…

Q: On January 1, Nic Inc. issued $100,000 of ten-year, 10% bonds that pay interest semiannually on June…

A: Bond: A bond represents a financial instrument that is issued by the issuer for raising debt…

Question

Hillside Excursions issues bonds due in 15 years with a stated interest rate of 11% and a face value of $150,000. Interest payments are made semi-annually. The market rate for this type of bond is 8%. Using a financial calculator or Excel, calculate the issue price of the bonds.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Ocean Adventures issues bonds due in 10 years with a stated interest rate of 10% and a face value of $330,000. Interest payments are made semi-annually. The market rate for this type of bond is 11%. Using a financial calculator or Excel, calculate the issue price of the bonds.
Ocean Adventures issues bonds due in 10 years with a stated interest rate of 12% and a face value of $490,000. Interest payments are made semi-annually. The market rate for this type of bond is 13% Calculate the issue price of the bonds . use excel or a financial calculator..
Roman Destinations issues bonds due in 10 years with a stated interest rate of 5% and a face value of $420,000. Interest payments are made semi-annually. The market rate for this type of bond is 4%. Using present value tables, calculate the issue price of the bonds.
savita
Novak Corporation issues $570,000 of 9% bonds that are due in 8 years and pay interest semi-annually. At the time of issue, the market rate for such bonds is 8%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Calculate the bonds' issue price by using (1) factor Tables A.2 and A.4, (2) a financial calculator, or (3) Excel function PV. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Issue price of bond $
Fold in the Cheese, Inc. is issuing $850000 of 8% 10-year bonds. These bonds will pay semi-annual interest payments. The market interest rate is currently 6%. Required: Compute what your bonds are worth. Round all calculations to 2 decimals. Record the sale of the bond with a journal entry. Record the journal entry for your first interest payment.
SpaceX issues a bond with a stated interest rate of 9%, face value of $185,000, and due in 6 years. Interest payments are made semi-annually. The market rate for this type of bond is 8%. What is the issue price of the bond? (Round final answer to whole dollars) Use the effective interest rate method Record the bond issue. Record the first interest payment on June 30, 2021. Date Account Name Debit Credit 1/1/21 6/30/23
Stealth Fitness Center issues 9%, 7-year bonds with a face amount of $300,000. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually. At what price will the bonds be issued? Use a financial calculator or Excel. (Do not round intermediate calculations. Round final answer to the nearest dollar amount.)
Mind Explorers issues bonds with a stated interest rate of 7%, face value of $220,000, and due in 10 years. Interest payments are made semi-annually. The market rate for this type of bond is 6%. Using present value tables, calculate the issue price of the bonds. (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.) Multiple Choice $236,367 $205,051 $220,000 $179,521 Beresford Inc. purchased several investments in debt securities during 2020, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent. Held-to-Maturity Securities: ABC Co. Bonds Trading Securities: DEF Co. Bonds GEH Inc. Bonds IJK Inc. Bonds Available-for-Sale Securities: LMN Co. Bonds Fair Value Fair Value Amortized Cost 12/31/2020 12/31/2021 12/31/2020 $372,500 $380,000 $405,000 Multiple Choice Fair Value 12/31/2020 $ 53,000 $ 52,000 $ 49,000 Fair Value…
Seaside issues a bond with a stated interest rate of 12%, the face value of $40,000, and due in 8 years. Interest payments are made semi-annually. The market rate for this type of bond is 14%. What is the issue price of the bond?
You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $1,000 par value bonds have a quoted annual interest rate of 9 percent, which is paid semiannually. The yield to maturity on the bonds is 8 percent annual interest. There are 15 years to maturity. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Compute the price of the bonds based on semiannual analysis. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. With 10 years to maturity, if yield to maturity goes down substantially to 6 percent, what will be the new price of the bonds? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.
Ocean Adventures issues bonds due in 10 years with a stated interest rate of 6% and a face value of $430,000. Interest payments are made semi-annually. The market rate for this type of bond is 5%. Using a financial calculator or Excel, what is the issue price of the bonds? Multiple Choice $399,443. $468,544. $430,000.