On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face amount of $20million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is12%. Interest is paid semiannually on June 30 and December 31. Required: 1. What would be theamounts related to the bonds Bishop would report in its balance sheet at December 31, 2021? 2. Whatwould be the amounts related to the bonds that Bishop would report in its income statement for the yearended December 31, 2021?

Coupon rate = 10%Face amount = $20,000,000Yield = 12%Maturity = 20 yearsTo find: The amounts…

Answered: On January 1, 2021, Bishop Company…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face amount of $19.5 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to the nearest whole dollar.)Required:1. Determine the price of the bonds at January 1, 2021.2. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2021.3. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method.4. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method.
Myriad Solutions, Incorporated issued 10% bonds, dated January 1, with a face amount of $520 million on January 1, 2024, for $460,353,920. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Questions What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2024? What would be the amount related to the bonds that Myriad would report in its income statement for the year ended December 31, 2024? What would be the amount(s) related to the bonds that Myriad would report in its statement of cash flows for the year ended December 31, 2024? Note: Round your answers to the nearest whole dollar.
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Myriad Solutions, Inc., issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2016 for $283,294,720. The bonds mature on December 31, 2025 (10 years). For bonds of similar risk and maturity the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2016? 2. What would be the amount related to the bonds that Myriad would report in its income statement for the year ended December 31, 2016? 3. What would be the amount(s) related to the bonds that Myriad would report in its statement of cash flows for the year ended December 31, 2016?
On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of ₱8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimalplaces for PV factors)Requirements: 24. How much is the interest expense for the year ended, December 31, 2022? 25. What is the carrying amount of the bonds on December 31, 2022?
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On January 1, 2021, a firm issues bonds with a face amount of $1,500,000. The stated rate is 10%, the market rate is 12%, the term is three years and payments are made twice a year, on June 30 and Dec. 31. What is the present value of the bond that the firm records on its books on the issue date? What is the interest expense that the firm records on its books when making the first cash payment to investors on June 30, 2021?
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