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- A Corporation sold an issue of 15-year bonds, having a total face value of P12,000,000 for P11,000,000. The bonds bear interest at 15%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Show the cash flow diagram, and compute the annual cost for interest and redemption of these bonds.Date Event Sept. 1, YR01 Purchased $2,000 of bonds issued by Target Inc. The bonds were purchased at 104 and Honda also paid a broker’s fee of $60. These bonds have a coupon rate of 6% and pay interest once each year, on February 1st. The bonds are dated February 1, YR01, and mature on February 1, YR06 (five-year term). At present Honda does not have a definite plan for this investment beyond earning interest income. At the purchase date these bonds have an effective yield to maturity of 4.2%. REQUIRED: Prepare a partial amortization schedule for the bond investment purchased on September 1, YR01. Your solution should cover through the interest payment to be received on February 1, YR03. Bond discount or premium is amortized using the effective-interest method of amortization.! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
- A Corporation sold an issue of 20-year bonds, having a total face value of 22M for 9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.A pharmaceutical company will contract a new loan in the sum of $2,000,000 that is secured by machinery and the loan has an interest rate of 6 percent. The company has also issued 4,000 new bond issues with an 8 percent coupon, paid semi-annually, and matures in 10 years. The bonds were sold at par, and incurred floatation costof 2 percent per issue. 1. Calculate the cost of debt and the market value of debt.Dinesh
- Hodson Corp. purchased fifteen $1,000 3% bonds of Power Source Corporation when the market rate of interest was 10%. Interest is paid semiannually, and the bonds will mature in eight years. Using the PV function in Excel, compute the price Hodson paid (the present value) for the bond investment. (Assume that all payments of interest and principal occur at the end of the period. Round your answer to the nearest cent.) Hodson paid on the bond investment.a corporation sold an issue of 15 years bonds having a total face value of 12,000,000 for 11,000,000. the bond bear interest 15% payable semiannually . the company wishes to established a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12% compunded seminuannually. show the cash flow diagram and compute the annual costfor interest and redemption of these bond.A company issued bonds with a par value of $250,000 and a maturity of 25 years. The Bonds pay interest every six months based on a nominal interest rate of 8% per year. If on the date of issuance of the bonds the market rate (yield) is 10%: a. What will be the selling price of the bonds? b. If after 15 years the company retires the bonds, paying the amount of $225,000, how much will the gain or loss on debt retirement? Go back and assume that the market rate is 5.75%. a. What will be the selling price of the bonds? b. Make the journal entry to recognize interest expense in the third six-month period of the bonds. Assume that the bonds do NOT pay periodic interest. a. What will be the selling price of the bonds? b. Make the journal entry to recognize interest expense in the third year of the bonds.
- The company has made an investment in government bonds. The bonds will generate an interest income of OMR 20623 each year for 6 years. The interest rate is 12% annually. Compute present value of the stream of interest income for 6 years. Select one: O a. 105412.55 O b. 84789.55 Oc. 64166.55 O d. 5016.04 O e. All the given choices in this question are not correctThe company has made an investment in government bonds. The bonds will generate an interest income of OMR 18707 each year for 6 years. The interest rate is 12% annually. Compute present value of the stream of interest income for 6 years. Select one: Oa. 95619.10 Ob. All the given choices in this question are not correct Oc 4550.02 Od. 58205.10 Oe. 76912.101. Help me selecting the right answer. Thank you
