Novak Inc. manufactures cycling equipment. Recently, the vice president of operations ofthe company has requested construction of a new plant to meet the increasing demand forthe company's bikes. After a careful evaluation of the request, the board of directors hasdecided to raise funds for the new plant by issuing $3,492,700 of 10% term corporatebonds on March 1, 2025, due on March 1, 2040, with interest payable each March 1 andSeptember 1. At the time of issuance, the market interest rate for similar financialinstruments is 8%.Click here to view factor tables.As the controller of the company, determine the selling price of the bonds. (Round factorvalues to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)Selling price of the bonds $

Bonds payable is a type of instrument where by an amount is borrowed for a fixed period with fixed…

Answered: Novak Inc. manufactures cycling…

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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Hincapie Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,000,000 of 11% term corporate bonds on March 1, 2025, due on March 1, 2040, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 10%. InstructionsAs the controller of the company, determine the selling price of the bonds.
Metlock Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,018,500 of 8% term corporate bonds on March 1, 2025, due on March 1, 2040, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 6%. Click here to view factor tables. As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)
Teal Mountain Inc. is building a new hockey arena at a cost of $2,900,000. It received a down payment of $580,000 from local businesses to support the project, and now needs to borrow $2,320,000 to complete the project. It therefore decides to issue $2,320,000 of 10-year, 10.5% bonds. These bonds were issued on January 1, 2020, and pay interest annually on each January 1. The bonds yield 10% to the investor and have an effective interest rate to the issuer of 10.4053%. (There is an increased effective interest rate due to the capitalization of the bond issue costs.) Any additional funds that are needed to complete the project will be obtained from local businesses. Teal Mountain Inc. paid and capitalized $58,000 in bond issuance costs related to the bond issue. Teal Mountain prepares financial statements in accordance with IFRS. 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. (a) Using (1) factor tables, (2)…
Windsor Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,290,000 of 13% term corporate bonds on March 1, 2023, due on March 1, 2037, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 12%.
Waterway Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,088,700 of 14% term corporate bonds on March 1, 2025, due on March 1, 2040, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 12%. Click here to view factor tables. As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.) Selling price of the bonds $
Windsor Inc. manufactures cycling equipment. Recently, the company's vice-president of operations has Pequest new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors ha decided to raise funds for the new plant by issuing $2,290,000 of 13% term corporate bonds on March 1, 2023, due on March 1, 203 with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instrumem is 12%. (a) As Windsor's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)
Please don't answer in handwritten..thanku
Indigo Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,151,400 of 7% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 6%.Click here to view factor tablesAs the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
Coronado Co. is building a new hockey arena at a cost of $2,420,000. It received a downpayment of $510,000 from local businesses to support the project, and now needs to borrow $1,910,000 to complete the project. It therefore decides to issue $1,910,000 of 10.0%, 10-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Click here to view factor table. (a) Your answer is partially correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places, e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date January 1, 2024 Account Titles and Explanation Cash Premium on Bonds Payable…
! Required information [The following information applies to the questions displayed below.] On January 1, 2024, Water World issues $26 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Water World intends to use the funds to build the world's largest water avalanche and the "tornado"- a giant outdoor vortex in which riders spin in progressively smaller and faster circles until they drop through a small tunnel at the bottom. 3-a. If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1. FVA of $1, and PVA of $1) 3-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 3a Req 3b If the market rate is 8%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Note: Use tables, Excel, or a financial calculator. Enter your answers in dollars not in millions (i.e., $5.5 million should be entered as 5,500,000).…
Pina Co. is building a new hockey arena at a cost of $2,510, 000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $ 2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10.0 %, 10- year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9% . Assume that on July 1, 2027, Pina Co. redeems half of the bonds at a cost of $1,079, 300 plus accrued interest. Prepare the journal entry to record this redemption.
The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a $600,000 piece of property for club expansion. The club manager is concerned about the club’s capability to purchase equipment and expand its facilities. One club member has agreed to help prepare the following financial statements and help the manager ascertain whether the plans are realistic. Additional information follows the financial statements. CORTEZ BEACH YACHT CLUB Statement of Income (Cash Basis) For the Year Ended October 31 Year 9 Year 8 Cash revenues Annual membership fees $ 710,000 $ 600,000 Lesson and class fees 468,000 360,000 Miscellaneous 4,000 3,000 Total cash received $ 1,182,000 $ 963,000 Cash costs Manager’s salary and…

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