on january 1, 2005, the knowshon moreno companyissued 200,000 bonds, each bond with a face value of $1,000. these moreno bonds sold for $187,000. each $1,000 bond comes with one detachable warrant topurchase one share of moreno common stock (parvalue) for $10. at the time the bonds and warrantswere issued, each share of moreno's common stock wasselling for $18. investment bankers estimate the valueof each warrant to be $23. it is determined that thebonds, if sold without the warrants, would sell for $185,000

Certainly! Let's break down the information provided and explain the calculations:1. **Bonds…

Answered: on january 1, 2005, the knowshon moreno…

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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Nichols Corporation has the following convertible bonds. A $100,000 convertible bond was issued at par on January 1, 2021, at 4%. The bond is convertible into 30,000 shares of common stock. Additionally, there was a convertible bond that was purchased on November 1, 2021, at par, for $200,000 with an interest rate of 6%, this bond is convertible into 20,000 shares of common stock. Both bonds pay interest annually. Nichols Corporation has total revenue of 800,000 and expenses of 400,000, which does not include interest expense or taxes. The tax rate is 40%. Additionally, the organization currently has 300,000 shares of common stock outstanding for the entire year. No dividends were paid in 2021. A. Calculate Earnings per share. B. Calculate Dilutive Earnings per share using the if converted method.
On March 1, Wayne Michaels bought 10 bonds from a particular company with a coupon rate of 9.325%. The purchase price was 89.875, and the commission was $7 per bond. Bonds from this particular company pay interest on February 1 and August 1. (a) What is the current yield (as a %) of the bond as of the purchase date? (Round your answer to one decimal place.) % (b) What is the total purchase price (in $) of the bonds? (Round your answer to the nearest cent.) $ (c) If Wayne sold the bonds on November 1 for 94.875, what are the proceeds (in $) from the sale? (Round your answer to the nearest cent.) $
On January 1, 2022, Fancy Co issued $100,000 in 10 year bonds. The bonds have a stated rate of 5% but are issued at a discount as the market rate is 7%. Because the market rate is higher, Fancy receives the present value which is $92,640. The coupon is paid annually on December 31st of each year. Provide the journal entries for Jan 1, 2022, and Dec 31st, 2022.
Sunland Corporation issued 6,000, five year, 3% bonds at 103 on January 1, 2023. Interest is paid annually. Each $1,000 bond carried one detachable warrant allowing the holder to purchase 100 common shares in Sunland at $9 per share, the price at which Sunland shares were trading on the day of the sale of the bonds. Similar straight bonds trading on the open market paid 6%. On June 30, 2023, 1,200 of the bond holders exercised the options to buy the shares. Prepare the journal entries to record these events. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places eg. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date January 1, 2023 June 30, 2023 Account Titles and…
On March 1, Wayne Michaels bought 10 bonds from a particular company with a coupon rate of 9.325%. The purchase price was 87.875, and the commission was $9 per bond. Bonds from this particular company pay interest on February 1 and August 1. (a)What is the current yield (as a %) of the bond as of the purchase date? (Round your answer to one decimal place.) (b) What is the total purchase price (in $) of the bonds? (Round your answer to the nearest cent.) (c) If Wayne sold the bonds on November 1 for 92.875, what are the proceeds (in $) from the sale? (Round your answer to the nearest cent.)
On July 1, 2018, Mason & Beech Services issued $33,000 of 10% bonds that mature in five years. They were issued at par. The bonds pay semiannual interest payments on June 30 and December 31 of each year. On December 31, 2018, what is the total amount paid to bondholders?
Use the financial statement effects template to record the accounts and amounts for the following four transactions involving investments in marketable debt securities classified as available-for-sale securities. Assume that these transactions occur in 2016 (before the new rules for securities went into effect).a. Loudder Inc. purchases 5,000 bonds with a face value of $1,000 per bond. The bonds are purchased at par for cash and pay interest at a semi-annual rate of 4%.b. Loudder receives semi-annual cash interest of $200,000.c. Year-end fair value of the bonds is $978 per bond.d. Shortly after year-end, Loudder sells all 5,000 bonds for $970 per bond.Use negative signs with answers, if appropriate.
Marigold Hills Ltd. issued five-year bonds with a face value of $160,000 on January 1. The bonds have a coupon interest rate of 7% and interest is paid semi-annually on June 30 and December 31. The market interest rate was 5% when the bonds were issued at a price of 109. Using above information, determine the proceeds received by the company when the bonds were issued. Proceeds from issue of the bonds eTextbook and Media $ Determine the interest expense recorded for the six months ending June 30 when the first interest payment is made. Interest expense $ eTextbook and Media Determine the balance in the Bonds Payable account immediately following the first interest payment. Balance in bonds payable account eTextbook and Media
On January 1, 2014 Victory Falls Company issued $2,100,000 in bonds that mature in 5 years. The bonds have a stated interest rate of 8% and pay interest quarterly each year. When the bonds were sold, the market rate of interest was 6%. These bonds, when issued and sold, contained a call feature, which allowed the company to retire the bonds early, if they elected, for a one-time payment equal to 1% of the book value at the time of retirement. Required: 1- Provide the adjusting journal entries to record interest expense on June 30, 2014, and December 31, 2014 using the straight-line method and using the effective-interest method. 2- What is the book value of the bonds on June 30, 2014 and December 31, 2014 using straight-line method and using effective-interest method?

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