On January 1, 2021, Mirada, Inc. issued five-year bonds with a face value of $100,000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $108,530, when the market rate of interest was 6%. What is the carrying value of the bonds on June 30, 2022 (i.e., after the third interest payment)? Multiple Choice O s107,786 O s112,718 S100,000 S106,230

On January 1, 2021, Mirada, Inc. issued five-year bonds with a face value of $100,000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $108,530, when the market rate of interest was 6%. What is the carrying value of the bonds on June 30, 2022 (i.e., after the third interest payment)? Multiple Choice O s107,786 O s112,718 S100,000 S106,230

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

See similar textbooks

Similar questions

On January 1, 2021, a company issued 10-year, $3,000,000, 6% bonds with semiannual interest payments. The market interest rate for these bonds is 7%.Required:(a) Calculate the issue price of the bonds and determine whether the bonds issued at face amount, at a discount, or at a premium. Also, (b) complete the amortization schedule for the first four semiannual interest payments, (c) record the issuance of the bonds, and record the (d) first semiannual interest payment and (e) second semiannual interest payment. How would your answers change if the bonds had an 8% stated interest rate?
Universal Foods issued 10% bonds, dated January 1, with a face amount of $170 million on January 1, 2024. The bonds mature on December 31, 2033 (10 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Required: 1. Determine the price of the bonds at January 1, 2024. 2. to 4. Prepare the journal entries to record their issuance by Universal
can you please explain these answers simply with every step explained
please answer
On June 1, 2023, JetCom Inventors Inc. issued a $560,000 8%, three-year bond. Interest is to be paid semiannually beginning December 1, 2023. Required: a. Calculate the issue price of the bond assuming a market interest rate of 9%. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Issue price of the bond
On April 1, 2020, Quicke Mart issued $1,000,000, 9% bonds at par plus accrued interest dated January 1, 2020. Interest is payable semi-annually on January 1 and July 1. The bonds mature on January 1, 2027. Required: Prepare journal entries to record the following transactions related to long-term bonds of Quicke Mart: 1. The issuance of the bonds. 2. The first interest payments.
On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is paid annually on December 31. The market (effective) rate of interest is 4%. If the bond sells as 88.2, what is the discount or premium (hint: determine the price of the bond first)?
On January 1, 2021, Jackie Company issued at 76 (gross of issuance costs of P46,260), 6% bonds which required interest payments of P450,000 every December 31 for 5 years. 1 How much is the interest expense for 2021? 2 How much is the carrying amount of the bonds as of December 31, 2022? 3 How much is the discount amortization during 2023?
On January 1, 2018, Oman Cables Industry (SAOG) issued 12% bonds dated January 1, 2018, with a principal amount of OR20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Note: To determine the price of bonds, you should use tables (2) present value of $1 and (4) present value of an ordinary annuity of$1 to find the appropriate P.V. factors to calculate the interest and principal. 1) The price of the bonds on January 1, 2018, is: OR22,492,452 this answer true or false Select one: 1. True 2. False
On January 1, 2022, Eleanor Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. Required: Calculate the issue price of the bonds if the market interest rate is 4%. Calculate the issue price of the bonds if the market interest rate is 8%.
Universal Foods issued 12% bonds, dated January 1, with a face amount of $125 million on January 1, 2024. The bonds mature on December 31, 2033 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Questions 1. Determine the price of the bonds at January 1, 2024. 2. to 4. Prepare the journal entries to record their issuance by Universal Foods on January 1, 2024, interest on June 30, 2024 and interest on December 31, 2031. 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)
On March 31, 2020, Adtech Inc. issued $200,000, 9%,10-year bonds. The bonds pay interest semi-annually, on September 30 and March 31. The first interest payment is on September 30, 2020. The bonds are issued at a price of 1141/4 (i.e., $228,500). The issuance price implies an effective interest rate of 7%. Bond issue costs are $10,000, which are amortized using the straight-line method. Adtech’s fiscal year-end is on December 31. 1. Prepare all necessary journal entries in relation to these bonds between March 30, 2020 and April 1, 2021. Make sure you indent your credits, and clearly mark the date for each journal entry. 2. What is the amount of the liability that Adtech has to the bondholders on September 30, 2021, after the interest payment on that date?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS