On May 1, 2024, Joe purchased $290,000 in zero-coupon bonds that mature on May 1, 2044. The bonds pay no interest during the period of time they are outstanding. The interest rate for such borrowings is at 9%. Interest compounds annually. Note: Use tables, Excel, or a financial calculator. Enter your answer rounded to the nearest whole dollar. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Calculate the price Joe paid for the bonds.

On May 1, 2024, Joe purchased $290,000 in zero-coupon bonds that mature on May 1, 2044. The bonds pay no interest during the period of time they are outstanding. The interest rate for such borrowings is at 9%. Interest compounds annually. Note: Use tables, Excel, or a financial calculator. Enter your answer rounded to the nearest whole dollar. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Calculate the price Joe paid for the bonds.

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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BlueLtd. Issued a $1,164,000, 10-year bond dated January 1, 2020. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Blue followed IFRS. Using 1 factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond. Click here to view the tactor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITYOF 1 (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answers to 0 decimal places, e.g. 5,275.) Proceeds from sale of bond : on bond Prepare the journal entries for above transactions. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…
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On January 1, 2021, Concord Corp. issued five-year bonds with a face value of $370.000 and a coupon interest rate of 6%, with interest payable semi-annually. Record the proceeds from the sale of the bonds if the market interest rate was 7%. See below for present value tables. (Do not use & signs or commas in your answer. Do not round intermediary calculations. Only round final answers to 2 decimal places ex: 5.25) TABLE Present Value of $1 PV (n) Periods TABLE 2 8 9 1 1 2 9T5 VO 5 6 Present Value of an Annuity of $1 PV (n) Periods 1% 1 (1 + i)" 2% 2.5% 3-5% 4% 4-5% 7% 8% 9% 10% 1.5% 3% 6% 0.99010 0.98522 0.98039 0.97561 0.97087 0.96618 0.96154 0.95694 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909 0.98030 0.97066 0.96117 0.95181 0.94260 0.93351 0.92456 0.91573 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.97059 0.95632 0.94232 0.92860 0.91514 0.90194 0.88900 0.87630 0.86384 0.83962 0.81630 0.79383 0.77218 0.75131 0.96098 0.94218 0.92385 0.90595 0.88849 0.87144 0.85480 0.83856…
Auerbach Inc. issued 8% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 10%. How much cash interest does Auerbach pay on March 31, 2022? (Round your answer to 2 decimal places.) Top of Form Multiple Choice $24.00 million. $12.00 million. $30.00 million. $15.00 million.
You have decided to invest in Corporate bonds. Your first bond investment (on Jan 2, 2021) is par value $1,000 DEF corporation bond, with a remaining maturity of 5 years, interest is paid semi-annual, the coupon rate is 4% (annual rate) and the effective market interest is 3% (annual rate). Calculate the amount you paid for the DEF bond on January 2, 2021 Calculate the amount of interest you will receive each year from the invest. How much cash will you receive at maturity for the bond?
On May 1, 2021, Bo Smith, proud father of newborn son Bobo, purchased $200,000 in zero-coupon bonds that mature on May 1, 2041. The bonds pay no interest during the period of time they are outstanding. The interest rate for such borrowings is at 9%. Interest compounds annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:Calculate the price Bo paid for the bonds.
GoldenSeal Pharmacy borrowed $630,000 on January 2, 2025, by issuing a 15% serial bond payable that must be paid in three equal annual installments plus interest for the year. The first payment of principal and interest comes due January 2, 2026. Complete the missing information. Assume bonds are issued at face value. (Complete all input fields. For accounts with a $0 balance, make sure to enter a 0 in the appropriate cell.) Current Liabilities: Bonds Payable Interest Payable Long-Term Liabilities: Bonds Payable 2025 December 31 2026 2027
On January 1, 2022, Fancy Co issued $100,000 in 10 year bonds. The bonds have a stated rate of 5% but are issued at a discount as the market rate is 7%. Because the market rate is higher, Fancy receives the present value which is $92,640. The coupon is paid annually on December 31st of each year. Provide the journal entries for Jan 1, 2022, and Dec 31st, 2022.
Exam Corp. is in need of cash. On 1/1/2023 Exam Corp. issues bonds with a $350,000 face value. The bonds have an 7.50% coupon rate. The market rate is 18%. The bonds have a life of 6 years, and are compounded semiannually. At the time of issuance, the price of the bonds is correctly calculated to be $218,420. All answers below can be rounded to the nearest dollar. What is the journal entry Exam Corp. will record on 6/30/23? Dr. Interest Revenue $19,658 Cr. Cash $13,125 Cr. Discount $6,533 Dr. Interest Expense $19,658 Cr. Discount $6,592 Cr. Cash $26,250 Dr. Interest Payable $19,658 Cr. Premium $6,592 Cr. Cash $26,250 Dr. Interest Expense $19,658 Cr. Cash $13,125 Cr. Premium $6,533 Dr. Interest Expense $19,658 Cr. Cash $13,125 Cr. Discount $6,533
Swoot, Inc issued serial bonds on January 1, 2020 that mature 5 years later on December 31, 2024. There are 2,500 bond issued with a face value per bond of $1,000. The stated rate is 8% and the market rate is 9%. In the box below, provide the journal entry for December 31, 2022. Round all numbers to the whole dollar using 5/4 rounding and no commas, enter debits as positive number and enter credits in brackets "()."
3. On January 1, 2021, Joanna Reece paid $291,000 for bonds with a face amount of $311,000. The coupon rate of interest is 11%. The effective rate of interest is 14%. Using the effective interest method, how much interest income is recognized by Joanna in 2022 (assume annual interest payments and amortization)? (Round your answer to the nearest dollar amount.)

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