On January 1 of the current year, Southwest Inc. adopts a plan to accumulate funds for environmental improvements to occur 4.5 years in the future, at an estimated cost of $2,000,000. Southwest plans to make four equal annual deposits in a fund that earns interest at 10% compounded annually. The first deposit is made on July 1 of the current year. Compute the amount of the annual deposit. Hanks Inc. establishes a debt retirement fund to retire debt of $72,820. Hanks makes three equal annual contributions of $20,000, starting on January 1 of the current year. The fund earns interest at 10%, compounded annually. The $72,820 debt must be paid on December 31, three years later. What is the balance of the fund at December 31 in three years? Gold Inc. invests $10,000 today in a mutual fund. Gold anticipates leaving this fund alone for 12 years. $ The fund is increased each year-end by specified compound interest rates as follows: years 1 to 4 inclusive,8%; 5 to 8 inclusive, 9%; and 9 to 12 inclusive, 10%. Compute the fund balance at the $ 307,112 26,620 5,874

On January 1 of the current year, Southwest Inc. adopts a plan to accumulate funds for environmental improvements to occur 4.5 years in the future, at an estimated cost of $2,000,000. Southwest plans to make four equal annual deposits in a fund that earns interest at 10% compounded annually. The first deposit is made on July 1 of the current year. Compute the amount of the annual deposit. Hanks Inc. establishes a debt retirement fund to retire debt of $72,820. Hanks makes three equal annual contributions of $20,000, starting on January 1 of the current year. The fund earns interest at 10%, compounded annually. The $72,820 debt must be paid on December 31, three years later. What is the balance of the fund at December 31 in three years? Gold Inc. invests $10,000 today in a mutual fund. Gold anticipates leaving this fund alone for 12 years. $ The fund is increased each year-end by specified compound interest rates as follows: years 1 to 4 inclusive,8%; 5 to 8 inclusive, 9%; and 9 to 12 inclusive, 10%. Compute the fund balance at the $ 307,112 26,620 5,874

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

s
Pina Co. is building a new hockey arena at a cost of $2,510, 000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $ 2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10.0 %, 10- year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9% . Assume that on July 1, 2027, Pina Co. redeems half of the bonds at a cost of $1,079, 300 plus accrued interest. Prepare the journal entry to record this redemption.
At the end of 2022, the following information is available for Great Adventures. Additional interest for five months needs to be accrued on the $32,200, 6% loan obtained on August 1, 2021. Recall that annual interest is paid each July 31. Assume that $12,200 of the $32,200 loan discussed above is due next year. By the end of the year, $20,000 in gift cards have been redeemed. The company had sold gift cards of $27,200 during the year and recorded those as Deferred Revenue. Great Adventures is a defendant in litigation involving a biking accident during one of its adventure races. The company believes the likelihood of payment occurring is probable, and the estimated amount to be paid is $14,200. For sales of MU watches, Great Adventures offers a warranty against defect for one year. At the end of the year, the company estimates future warranty costs to be $6,200. No Date General Journal Debit Credit 1 Dec 31 Interest Expense 805 Interest Payable 805…
Riverbed Co. is building a new music arena at a cost of $5,652,000. It received a down payment of $642,000 from local businesses to support the project, and now needs to borrow $5,010,000 to complete the project. It therefore decides to issue $5,010,000 of 7%, 20- year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 9%. Prepare the journal entry to record the issuance of the bonds on January 1, 2024. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal place e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation January 1,2024 Cash Discount on Bonds Payable Bonds Payable Debit 4095316 914684 Credit 5010000 Prepare a bond amortization…
s The Village of Hawksbill issued $5,900,000 in 5 percent general obligation, tax-supported bonds on July 1, 2019, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund. Interest payment dates are December 31 and June 30. The first of 20 annual principal payments is to be made June 30, 2020. Hawksbill has a calendar fiscal year. 1. A capital projects fund transferred the premium (in the amount of $59,000) to the debt service fund. 2. On December 31, 2019, funds in the amount of $147,500 were received from the General Fund and the first interest payment was made. 3. The books were closed for 2019. 4. On June 30, 2020, funds in the amount of $383,500 were received from the General Fund, and the second interest payment ($147,500) was made along with the first principal payment ($295,000). 5. On December 31, 2020, funds in the amount of $140,125 were received from the General Fund and the third interest payment was made (also in…
The government lent $200,000 to Sweet Industries, who signed a 5-year, zero-interest note dated January 1, 2021 to help finance the construction of a building. The market rate of interest is 4% and the effective interest method of amortization is used. The loan will be forgiven if Sweet provides employment for a specified number of individuals for a specified period of time. If these conditions are not met, the amount is due to the government in full in five years. Sweet believes it will be able to meet the conditions.
2. Big City provides a defined benefit pension plan for employees of the city water department,an enterprise fund. Assume that the service cost component is $420,000, and interest on thepension liability is $380,000 for the year. Actual returns on plan assets for the year were$300,000 while the projected level of earnings on plan investments was $360,000. Thisdifference is to be amortized over a 5 year period, beginning this year. Finally assume theCity is amortizing a deferred inflow resulting from a change in plan assumptions from a prioryear in the amount of $10,000 per year. Required: Prepare journal entries to record annual pension expense for the enterprise fund.
Your Corporation bought $450, 000 of equipment using an installment loan 1/1/20. The note provides for 4.5 % annual interest and equal annual payments of interest and principal of $91,395.50 on December 31 of each year. What is the amount of principal reduction related to the YEAR 2 payment?

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