i Required information [The following information applies to the questions displayed below.] On January 1, 2024, Adventure World issues $40.4 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. Req 2a Req 2b If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.) Bond Characteristics Face amount Interest payment Number of periods Market interest rate Issue price Amount $ 40,400,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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i
Required information
[The following information applies to the questions displayed below.]
On January 1, 2024, Adventure World issues $40.4 million of 9% bonds, due in 20 years, with interest payable
semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a
roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.
2-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
2-b. Will the bonds issue at face amount, a discount, or a premium?
Complete this question by entering your answers in the tabs below.
Req 2a
Req 2b
If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate
factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as
5,500,000). Round your final answers to the nearest whole dollar.)
Bond Characteristics
Face amount
Interest payment
Number of periods
Market interest rate
Issue price
Amount
$
40,400,000
<Req 2a
Req 2b
>
Transcribed Image Text:i Required information [The following information applies to the questions displayed below.] On January 1, 2024, Adventure World issues $40.4 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride. 2-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) 2-b. Will the bonds issue at face amount, a discount, or a premium? Complete this question by entering your answers in the tabs below. Req 2a Req 2b If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000). Round your final answers to the nearest whole dollar.) Bond Characteristics Face amount Interest payment Number of periods Market interest rate Issue price Amount $ 40,400,000 <Req 2a Req 2b >
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