On January 1, 2022, Patrick Company purchased serial bonds with face amount of P3,000,000 and stated 12% interest payable annually every December 31. The bonds are to be held to maturity with a 10% effective yield. The bonds mature at an annual installment of P1,000,000 every December 31. Present value of 1 at 10% for one period Present value of 1 at 10% for two periods Present value of 1 at 10% for three periods What is the purchase price of the serial bonds? 0.91 0.83 0.75 A. 3,106,800 B. 3,060,000 C. 3,045,000 2 140 400

On January 1, 2022, Patrick Company purchased serial bonds with face amount of P3,000,000 and stated 12% interest payable annually every December 31. The bonds are to be held to maturity with a 10% effective yield. The bonds mature at an annual installment of P1,000,000 every December 31. Present value of 1 at 10% for one period Present value of 1 at 10% for two periods Present value of 1 at 10% for three periods What is the purchase price of the serial bonds? 0.91 0.83 0.75 A. 3,106,800 B. 3,060,000 C. 3,045,000 2 140 400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On March 1, 2021, JebaMac Company issued 6% term bonds with a face amount of P1,000,000 due March 1, 2025. Interest is payable semiannually on September 1 and March 1. On the date of issue, the effective interest rate is 7%. Round off PV factors to 4 decimals. What is the carrying amount of the bonds as of calendar year ending December 31, 2022?
On January 1, 2021, Canada Corp. purchased bonds with a face value of P7,500,000 and a stated interest rate of 10% per year payable semi-annually every June 30 and December 31. The bonds were acquired to yield 11%. These were recorded as financial assets at amortized cost. On July 31, 2024, the bonds were sold at 111 including accrued interest. How much is the purchase price of the bonds? Round off to the nearest whole number.
On January 1, 2021, LMN Company issued 10-year bonds with a face amount of P3,000,000 at a stated interest rate of 8% payable annually on January 1. The bonds were priced to yield 10%. Present value factors are as follows: Present value of P1 for 10 periods Present value of an ordinary annuity of P1 for 10 periods At 8%. 0.46326.7101 At 10%0.38556.1446 The total issue price of the bonds was:
On January 1, 2022, P Corp. issued eight-year, 3% bonds with a face value of $400,000, with interest payable semi- annually on June 30 and December 31. The bonds were sold to yield 4%. Table values are: Present value of 1 for 8 periods at 3% .789 Present value of 1 for 8 periods at 4% 731 Present value of 1 for 16 periods at 1.5% 788 Present value of 1 for 16 periods at 2% .728 Present value of annuity for 8 periods at 3% Present value of annuity for 8 periods at 2% 7.020 7.325 Present value of annuity for 16 periods at 1.5% 14.131 Present value of annuity for 16 periods at 2% 13.578 What is the issue price of the bond?
On January 1, 2021, EXERT EFFORT Company purchased serial bonds with face value of P3,000,000 and stated 12% interest payable annually every December 31. The bonds are to be held as financial asset at amortized cost with a 10% effective yield. The bonds mature at an annual installment of P1,000,000 every December 31. The rounded present value of 1 at 10% are: For one period = 0.91; For two periods = 0.83; For three periods = 0.75. What is the present value of the serial bonds on January 1, 2021?
Domestic
On January 1, 2024, Wildhorse Co. issued eight-year bonds with a face value of $6010000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are: Present value of 1 for 8 periods at 10% 0.46651 Present value of 1 for 8 periods at 12% 0.40388 Present value of 1 for 16 periods at 5% 0.45811 Present value of 1 for 16 periods at 6% 0.39365 Present value of annuity for 8 periods at 10% Present value of annuity for 8 periods at 12% Present value of annuity for 16 periods at 5% Present value of annuity for 16 periods at 6% 5.33493 4.96764 10.83777 10.10590 The present value of the principal is O $2365837. O $2427319. O $2753241. O $2803725.
Myriad Solutions, Incorporated issued 10% bonds, dated January 1, with a face amount of $320 million on January 1, 2024, for $283,294,720. ● ● 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. Required: 1. What would be the net amount of the liability Myriad would report in its balance sheet at December 31, 2024? 2. What would be the amount related to the bonds that Myriad would report in its income statement for the year ended December 31, 2024? 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, 2024? Note: Round your answers to the nearest whole dollar. 1. Net liability reported 2. Interest Expense 3. Amount reported in Statement of Cash flows
On January 1, 2025, Sandhill Co. issued ten-year bonds with a face value of $5,125,000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are. Present value of 1 for 10 periods at 10% 0.38554 Present value of 1 for 10 periods at 12% 0.32197 Present value of 1 for 20 periods at 5% 0.37689 Present value of 1 for 20 periods at 656 0.31180 Present value of annuity for 10 periods at 10% Present value of annuity for 10 periods at 12% Present value of annuity for 20 periods at 536 Present value of annuity for 20 periods at 6% 6.14457 5.65022 1246221 11.46992 (a) Calculate the issue price of the bonds. (Round final answer to O decimal places, e.g. 25,000) Issue price of bond $ eTextbook and Media Save for Later (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
On January 1, 2024, Cullumber Co. issued eight-year bonds with a face value of $5920000 and a stated interest rate of 4%, payable semiannually on June 30 and December 31. The bonds were sold to yield 6%. Table values are: Present value of 1 for 8 periods at 4% Present value of 1 for 8 periods at 6% Present value of 1 for 16 periods at 2% Present value of 1 for 16 periods at 3% Present value of annuity for 8 periods at 4% Present value of annuity for 8 periods at 6% Present value of annuity for 16 periods at 2% Present value of annuity for 16 periods at 3% The present value of the principal is O $4312424. O $4325685. O $3714267. O $3689166. 0.73069 0.62741 0.72845 0.62317 6.73274 6.20979 13.57771 12.56110
The Bradford Company issued 8% bonds, dated January 1, with a face amount of $80 million on January 1, 2024 to Saxton-Bose Corporation. The bonds mature on December 31, 2033 (10 years). For bonds of similar risk and maturity, the market yield is 10% Interest is paid semiannually on June 30 and December 31. Required: 1. to 3. Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2024, interest revenue on June 30, 2024 and interest revenue on December 31, 2024 (at the effective rate). Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. 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 1, 2024, Baddour, Incorporated, issued 10% bonds, dated January 1, with a face amount of $160 million. The bonds were priced at $142.00 million (plus accrued interest) to yield 12%. The price if issued on January 1 would have been $139.25 million. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September 30, 2024?