On January 1, 2020, Johny Industries issued ten-year bonds with a face value of $2,000,000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Calculate the issue price of the bond. You may use Excel.
Q: Tano Company issues bonds with a par value of $90,000 on January 1, 2021. The bonds' annual contract…
A: Par value of bonds$90,000Less: Proceed received$85,431Discount ($90,000 - $85,431)$4,569
Q: On January 1, 2024, Neighborhood Credit Union (NCU) issued 6%, 20-year bonds payable with face value…
A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…
Q: January 1, 2024, Winter Fog Inc. (WFI) issued eight-year, 3% bonds with a face value of $600,000.…
A: A bond refers to an instrument used by the issuing organization to raise debt capital from…
Q: On October 1, 2020, Ross Wind Energy Inc. issued a $1,610,000, 7.0%, seven-year bond. Interest is to…
A: A bond is considered a debt instrument that allows the issuer of the bond to get the required funds.…
Q: On January 1, 2021, Loop Raceway issued 520 bonds, each with a face value of $1,000, a stated…
A: The bonds are the financial instruments for the business to raise money from the investors. The…
Q: Tano Company issues bonds with a par value of $94,000 on January 1, 2021. The bonds' annual contract…
A: A bond is a debt security that is always issued by a company, municipality, or government. It is a…
Q: Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued…
A: Here,FaceValue of Bond is $150,000Issued Value is 102% of Face Value, therefore, Current Value will…
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: On February 1, 2022, Ellison Co. issued ten-year bonds with a face value of $50,000,000 and a stated…
A: The objective of the question is to calculate the issue price of the bonds, prepare the journal…
Q: On June 30, 2024, Single Computers issued 8% stated rate bonds with a face amount of $100 million.…
A: Issue price of a bond means the price at which the bond is issued. It can be issued at par, premium…
Q: Requirement 1. If the market interest rate is 5% when ACU issues its bonds, will the bonds be priced…
A: The bonds are the debt instrument. These debt instruments are generally issued by the corporation or…
Q: When Patey Pontoons issued 10% bonds on January 1, 2024, with a face amount of $560,000, the market…
A: Net present value:Calculation used to evaluate the investment and financing decisions that involve…
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: On January 2, current year, Kalahari Limited issued $1,000,000, 10-year bonds for $1,150,000. The…
A: Maturity payment refers to the final payment that's made to bondholders when a bond reaches its…
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: Stanford issues bonds dated January 1, 2019, wi 3%, and interest is paid semiannually on June 30…
A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…
Q: I. On January 1, 2022, Broncos Universal issued 12% bonds dated January 1, 2022, with a face amount…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable…
A: A bond is a financial debt security issued by large business organizations or governments. It is…
Q: On January 1, 2020, Goodwill Company issued 10% bonds dated January 1, 2011, with a face amount of…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
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: On January 1, 2024. Ithaca Corporation purchases Cortland Incorporated bonds that have a face value…
A: Bond is a debt security which is purchased to earn the fixed interest on the investment with low…
Q: On January 1, 2021, Water Wonderland issues $20 million of 7% bonds, due in eight years, with…
A: Issue Price is the consideration amount received from investor in exchange of bonds in primary…
Q: On January 1, 2018, Wauwatosa Inc. issued 5- year bonds with a fave value of $200,000 and a stated…
A: When the issue price of the bond is higher than its face value, the bonds are said to be issued at a…
Q: AAA Company issued bonds with face amount of P9,000,000 on January 1, 2020. The nominal rate of 6%…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: How much interest will Flamengo pay to the bondholders on December 31 2022?
A: It is pertinent to note that the current price or value of bond is the present value of all cash…
Q: On January 1, 2024, Christmas Anytime issues $680, 000 of 5% bonds, due in 10 years, with interest…
A: Issue price of bonds would be the present value of the interest annuity & maturity amount at…
Q: On January 1, 2024, Rare Bird Limited purchased 15% bonds dated January 1, 2024, with a face amount…
A: The bonds a debt securities issued by corporations and government entities to raise funds. Bonds are…
Q: On June 1, 2023, JetCom Inventors Inc. Issued a $540,000, 12%, three-year bond. Interest is to be…
A: Par value: $540,000Maturity period: 3 yearsNumber of payments per year: 2Coupon rate per annum:…
Q: On January 1, 2018, Fort Industrial Corp. issued bonds with a face value of $1,000,000. The bonds…
A: Bonds are the instrument acknowledging debt due from one party to another party on specified future…
Q: he Maple Company issued 5-year bonds on January 1, 2020. The debt has a face value of $400,000 and…
A: Price of bond is the sum of present value of future cash flows from the bond. Cash flows include…
Q: On January 1, 2020, University Theatres issued $495,000 face value of bonds. The stated rate is 8%,…
A: Formula: Present value of single amount: PV = 1 / ( 1 + R )N Future value of single amount: FV = 1…
Q: On October 1, 2023, Ross Wind Energy Inc. issued a $1,590,000, 11.5%, seven-year bond. Interest is…
A: It is a common approach used to amortize the discount or premium on a bond over its life. It is a…
Q: McAllen Corporation is issuing a $20,000,000 20-year bond with a stated interest rate of 10%. This…
A: Bond A bond is basically an interest-bearing loan instrument that is issued by the companies in…
Q: Kingbird Ltd. issued a $778,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12%…
A: Issue price of bonds would be the present value of the interest annuity & maturity amount at…
Q: Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual contract…
A: Bonds payable refers to a type of long-term debt that a company or organization issues to borrow…
Q: Quatro Company issues bonds dated January 1, 2021, with a par value of $400,000. The bonds' annual…
A: The bonds are the financial instruments that are used to raise money from the market or investors.…
Q: Tano Company issues bonds with a par value of $87,000 on January 1, 2021. The bonds' annual contract…
A: Introduction: Bonds are issued to finance ongoing maintenance as well as infrastructure upgrades.…
Q: Colwood Candies issued $370,000 of 12%, five-year bonds on January 1, 2020, when the market interest…
A: Amortization schedule is the one which is prepared to record the interest incurred during a period,…
Q: On June 1, 2023, JetCom Inventors Inc. issued a $560,000 8%, three-year bond. Interest is to be paid…
A: ( I solved this problem before so I am just providing you solution and if you have any queries…
Q: On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is…
A: Determine the price of the bond: Present value of principle amount ($200,000, 4%, 10 years)…
Q: On January 1, 2020 Lance Co. issued five-year bonds with a face value of $700,000 and a stated…
A: Solution:-Bond price means the price at which a bond should tarde in the market. It is the summation…
Q: On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest…
A: Prepare journal entries as follows: Result:
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, 2021, a firm issues bonds with a face amount of $1,500,000. The stated rate is 10%,…
A: Issuing bonds is one way for companies to raise money. A bond functions as a loan between an…
Q: January 1, December 31. The bonds mature on January 1, 2034. The bonds are sold to yield 12%, Click…
A: Bonds are financial debt instruments. When the contract rate is less than the market rate the bonds…
Q: On December 31. 2020, Paulson company issues a 4-year bond with a par value of $100,000, a contract…
A: Bond issuance is an act in which bond securities are provided by the company in return for cash or…
Q: 1. On January 1, 2024, Lansing Group issued $1,000,000 of 6% bonds, dated January 1. Interest is…
A: The objective of the question is to determine the price of the bonds, record the issuance, prepare…
On January 1, 2020, Johny Industries issued ten-year bonds with a face value of $2,000,000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Calculate the issue price of the bond. You may use Excel.
Step by step
Solved in 2 steps
- Company E issues $300,000 worth of 7.5% bonds on January 1, 20x2, which will mature on December 31, 20x3. The market rate on the date of issuance is 6%. Interest will be paid semiannually on June 30 and December 31. Calculate the purchase price of the bonds. Does the price make sense? Explain. How will the bond value appear in the newspaper? Record all journal entries necessary from the date of issue until the maturity date. Be sure to show all calculations.National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January 1, 2018.The bonds mature on December 31, 2021 (4 years). For bonds of similar risk and maturity the market yield was10%. Interest is paid semiannually on June 30 and December 31.Required:1. Determine the price of the bonds at January 1, 2018.2. Prepare the journal entry to record their issuance by National on January 1, 2018.3. Prepare an amortization schedule that determines interest at the effective rate each period.4. Prepare the journal entry to record interest on June 30, 2018.5. Prepare the appropriate journal entries at maturity on December 31, 2021.Stanford issues bonds dated January 1, 2021, with a par value of $253,000. The bonds' annual contract rate is 6%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $239,733. 1. What is the amount of the discount on these bonds at issuance?2. How much total bond interest expense will be recognized over the life of these bonds?3. Prepare an effective interest amortization table for these bonds.
- Mindsetta Music Inc. issued bonds on March 1, 2020, with a par value of $420,000. The bonds mature in 15 years and pay 14.00% annual interest in two semiannual payments. On the issue date, the annual market rate of interest for the bonds turned out to be 16%. (Table attached for reference) 1. What is the semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Are the bonds issued at discount, premium, or par? 4. Estimate the market value of the binds as the date they were issued 5. Journal entry: Record the sales of bonds at discount on the original issue dateVirginia Vista Company has 4%, 10-year bonds payable that mature on June 30, 2028. The bonds are issued on June 30, 2018, and Virginia Vista pays interest each June 30 and December 31. Read the requirements. Requirement 1. Will the bonds be issued at face value, at a premium, or at a discount if the market interest rate on the date of issuance is 2%? If the market interest rate is 6%? If the market interest rate is 2%, the bonds will be issued at If the market interest rate is 6%, the bonds will be issued at Requirement 2. Virginia Vista issued $400,000 of the bonds at 89. Round all calculations to the nearest dollar. a. Record issuance of the bonds on June 30, 2018. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) Date Accounts and Explanation Debit Credit 2018 (a) Jun. 30 b. Record the payment of interest and amortization of the discount on December 31, 2018. Use the straight-line…BlueLtd. Issued a $1,164,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Blue followed IFRS. Using 1 factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the tactor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITYOF 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275.) Proceeds from sale of bond : on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…
- Your Company issued a $150,000 face value bond on January 1, 2020. The 20 year term bond was issued at 102 and had a 4% stated rate of interest that is payable on December 31st of each year. What is the carrying value of the bond after the third interest payment is made? Carrying value = bond face + bond premiumOn September 30, 2024, the Techno Corporation issued 8% stated rate bonds with a face amount of $200 million. The bonds mature on September 30, 2044 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30. Required: Determine the price of the bonds on September 30, 2024. Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount, not in millions. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Time values are based on: n= i= Cash Flow Interest Principal Price of bonds S S Amount 40 5% 8,000,000 200,000,000 Present ValueOn January 1, 2024, Anne Teak Furniture issued $100,000 of 12% bonds, dated January 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in 4 years. The annual market rate for bonds of similar risk and maturity is 14%. What was the issue price of the bonds? Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Multiple Choice $89,460 $120,942 $95,460 $94,029
- Carla Vista Inc. issued $920,000 of 10 - year, 3% bonds on January 1, 2024. Interest is to be paid semi-annually. The market interest rate was 4%. What is the face value of the bond? When will this be paid?Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $400 million on July 1, 2021, at a price of $380 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest at the effective interest rate at December 31. What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2021, if it uses the direct method?On January 1, 2020, Blindo Corp. issued ten - year, 12% bonds with a face value of $ 500,000, with interest payable semi-annually on June 30 and December 31. At the time, the market rate was 10%. Required: a) Find PMT and Use your calculator to calculate the issue price of the bonds. Round the answer to the nearest dollar. b) Independent of your solution to part a), assume that the issue price was $ 562, 000. Prepare the amortization table for 2020. Round values to the nearest dollar.
