[The following information applies to the questions displayed below]On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in15 years, with interest payable semiannually on June 30 and December 31 each year.Required:1-a. If the market rate is 7%, calculate the issue price (PV of $1. PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from thetables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1decimal place. Round your final answers to the nearest whole dollar.)Bond CharacteristicsAmountFace amount40,000,000Interest paymentPeriods to maturityMarket interest rateIssue price1-b. The bonds will issue atOA DiscountOA PremiumO Face amount

Given in the question is the below information regarding, Wild Rapids Water Park issues $40.0…

On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1-a. If the market rate is 7%, calculate the issue price (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use appropriate factor(s) from tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to decimal place. Round your final answers to the nearest whole dollar.) Bond Characteristics Amount Face amount $4 40,000,000 Interest payment Periods to maturity Market interest rate Issue price

On January 1, 2021, Wild Rapids Water Park issues $40.0 million of 8% bonds to finance expansion. The bonds are due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1-a. If the market rate is 7%, calculate the issue price (FV of $1, PV of $1. FVA of $1, and PVA of $1) (Use appropriate factor(s) from tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to decimal place. Round your final answers to the nearest whole dollar.) Bond Characteristics Amount Face amount $4 40,000,000 Interest payment Periods to maturity Market interest rate Issue price

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 December 31, 2020, Whitfield Corp. issued $ 400,000 10% bonds, due on December 31, 2025. Interest is to be paid semi-annually on June 30 and December 31. The bonds were sold at a market value of $432,444 to yield 8% effective annual interest. Whitfield has a calendar year-end.Required:1. Complete the following amortization schedule for the dates indicated. Show to the second decimal place (dollars and cents). Use the effective-interest method.
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On January 1, 2024, Christmas Anytime issues $850,000 of 6% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Assume that the market interest rate is 5% and the bonds issue at a premium. 3a. Calculate the issue price of a bond.3b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
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Required information [The following information applies to the questions displayed below.] On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $559,229. Required: 1. Complete the first three rows of an amortization schedule. (Round your final answers to the nearest whole dollar.) Date Cash Paid Answer is complete but not entirely correct. Carrying Change in Carrying Value Value Interest Expense 01/01/2024 06/30/2024 $ 42,000 $ 12/31/2024 42,000 X 44,738 $ 44,519 X 2,738 x 2,519 X $ 559,229 561,967 X 564,486 X
On January 1, 2021, Frontier World issues $41 million of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.Required:1. If the market rate is 8%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.2. If the market rate is 9%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.3. If the market rate is 10%, will the bonds issue at face amount, a discount, or a premium? Calculate the issue price.
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Elm Corporation issued 5-year bonds with a face value of $250,000 on July 1, 2022, in order to fund a plant expansion. The bonds mature on June 30th, 2027, with interest payable on December 31, and June 30. The contract (stated) rate of interest is 10%. When the bonds sold in the marketplace, the market rate of interest was 10.6%. Elm’s fiscal year ends on December 31. 1) At what price were the bonds issued? Prepare the journal entry. What would be the price quote for the bonds? 2) Prepare the journal entry for December 31, 2022. What would the semiannual interest entry be under the straight-line method?
On January 1, 2024, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 10% and the bonds issued at $457,102. Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $458,633 on December 31, 2025. (Round your final answers to nearest whole dollar.)
Required information [The following information applies to the questions displayed below.] On January 1, 2024, Splash City issues $460,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $502,303. Required: 1. Complete the first three rows of an amortization schedule. (Round your final answers to the nearest whole dollar.) Date 1/1/2024 6/30/2024 12/31/2024 Cash Paid Interest Expense Change in Carrying Value Carrying Value
Required information [The following information applies to the questions displayed below.) On January 1, 2024, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 6% and the bonds issued at $644,632 Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $633,887 on December 31, 2026. (Round your final answers to nearest whole dollar) Date 01/01/2024 06/30/2024 12/31/2024 06/30/2025 12/31/2025 06/30/2026 12/31/2026 Cash Paid Change in Expense Carrying Value Carrying Valua Check my wor
Randy Mining Co. is expanding its operations in northern Ontario. On December 21, 2018, thecompany issued $570,000 of 5%, seven-year bonds for $538,181. Interest is paid annually onDecember 31. The market rate of interest is 6%. The company uses the effective interest ratemethod. Required:Prepare the journal entries for December 31, 2019 and 2020.

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