On July 1, 2023, RWL Limited issued bonds with a face value of $870,000 due in 20 years, paying interest at a face rate of 7% on January 1 and July 1 each year. The bonds were issued to yield 8%. The company's year-end was September 30. The company used the effective interest method of amortization. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (a) Your Answer Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the premium or discount on the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) (b) Correct Answer (Used) Discount on bond $ 86,098 i Prepare a partial Bond Premium/Discount Amortization Schedule for RWL Limited. Only prepare the entries in the schedule for July 1, 2023, January 1, 2024, and July 1, 2024. (Round answers to O decimal places, e.g. 5,275.)
On July 1, 2023, RWL Limited issued bonds with a face value of $870,000 due in 20 years, paying interest at a face rate of 7% on January 1 and July 1 each year. The bonds were issued to yield 8%. The company's year-end was September 30. The company used the effective interest method of amortization. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. (a) Your Answer Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the premium or discount on the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) (b) Correct Answer (Used) Discount on bond $ 86,098 i Prepare a partial Bond Premium/Discount Amortization Schedule for RWL Limited. Only prepare the entries in the schedule for July 1, 2023, January 1, 2024, and July 1, 2024. (Round answers to O decimal places, e.g. 5,275.)
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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Transcribed Image Text:On July 1, 2023, RWL Limited issued bonds with a face value of $870,000 due in 20 years, paying interest at a face rate of 7% on
January 1 and July 1 each year. The bonds were issued to yield 8%. The company's year-end was September 30. The company used the
effective interest method of amortization.
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1.
(a)
Your Answer
Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the premium or discount on the bonds. (Round
factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.)
(b)
Discount
Correct Answer (Used)
Cash Paid
on bond
$
Prepare a partial Bond Premium/Discount Amortization Schedule for RWL Limited. Only prepare the entries in the schedule for
July 1, 2023, January 1, 2024, and July 1, 2024. (Round answers to O decimal places, e.g. 5,275.)
List of Accounts
86,098 i
$
Interest Expense
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Premium
Amortized
$
Carrying Amoun
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