On January 1, Ruiz Company issued bonds as follows: Face Amount: $500,000 Number of Years: 15 Stated Interest Rate: 7% Interest payments per year Required: 1) Calculate the bond selling price given the two market interest rates below. Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking th this worksheet). Note: Rounding is not required. a) Annual Market Rate 9%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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C20
fx
A
В
C
G
20
21
b)
Annual Market Rate
6.00%
22
Semiannual Interest Payment:
$17,500
23
PV of Face Amount:
24
+ PV of Interest Payments:
25
Bond Selling Price:
26
27 2. Use the answer either "Premium" or "Discount" to the following items.
28
29 The bond in (a) sold at a:
Discount
30 The bond in (b) sold at a:
Premium
31
32 3. Use the Excel PV function to verify the selling prices of the bonds.
33
a)
Annual Market Rate
9%
34
Bond Selling Price
35
36 b)
Annual Market Rate
6%
37
Bond Selling Price
38
39
40
Transcribed Image Text:C20 fx A В C G 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 + PV of Interest Payments: 25 Bond Selling Price: 26 27 2. Use the answer either "Premium" or "Discount" to the following items. 28 29 The bond in (a) sold at a: Discount 30 The bond in (b) sold at a: Premium 31 32 3. Use the Excel PV function to verify the selling prices of the bonds. 33 a) Annual Market Rate 9% 34 Bond Selling Price 35 36 b) Annual Market Rate 6% 37 Bond Selling Price 38 39 40
C20
fx
A
В
C
On January 1, Ruiz Company issued bonds as follows:
3
4
Face Amount:
$500,000
5
Number of Years:
15
Stated Interest Rate:
7%
7
Interest payments per year
2
8.
9.
Required:
10 1) Calculate the bond selling price given the two market interest rates below.
11
Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottor
12 this worksheet).
13
Note: Rounding is not required.
14
15
a)
Annual Market Rate
9%
16
Semiannual Interest Payment:
$17,500
17
PV of Face Amount:
18
PV of Interest Payments:
19
Bond Selling Price:
0.00
20
21
b)
Annual Market Rate
6.00%
22
Semiannual Interest Payment:
$17,500
23
PV of Face Amount:
24
PV of Interest Payments:
25
Bond Selling Price:
%3D
26
A Future Value of Annuity of $1
A Present Value of Annuity of $1
A Graded Worksheet
II
Transcribed Image Text:C20 fx A В C On January 1, Ruiz Company issued bonds as follows: 3 4 Face Amount: $500,000 5 Number of Years: 15 Stated Interest Rate: 7% 7 Interest payments per year 2 8. 9. Required: 10 1) Calculate the bond selling price given the two market interest rates below. 11 Use formulas that reference data from this worksheet and from the appropriate future or present value tables (found by clicking the tabs at the bottor 12 this worksheet). 13 Note: Rounding is not required. 14 15 a) Annual Market Rate 9% 16 Semiannual Interest Payment: $17,500 17 PV of Face Amount: 18 PV of Interest Payments: 19 Bond Selling Price: 0.00 20 21 b) Annual Market Rate 6.00% 22 Semiannual Interest Payment: $17,500 23 PV of Face Amount: 24 PV of Interest Payments: 25 Bond Selling Price: %3D 26 A Future Value of Annuity of $1 A Present Value of Annuity of $1 A Graded Worksheet II
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