per bond, at 105. Eá An entity issued 5,000 10-year bonds, face amount pond is accompanied by one warrant that permits the bondholder to purchase equity shares, par P100, at P110 per share. Assume that the interest payable annually at a nominal rate of 10% per annum. When the bonds are issue, the prevailing market rate of interest for similar bon without warrants is 12% per annum.

per bond, at 105. Eá An entity issued 5,000 10-year bonds, face amount pond is accompanied by one warrant that permits the bondholder to purchase equity shares, par P100, at P110 per share. Assume that the interest payable annually at a nominal rate of 10% per annum. When the bonds are issue, the prevailing market rate of interest for similar bon without warrants is 12% per annum.

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

TDC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1, 2020. The nominal rate is payable annually on December 31. When the bonds are issued, the prevailing market rate of interest for similar bonds without warrants is 15% per annum. Each bond is accompanied by a warrant that permits the bondholder to purchase 20 shares of common stock, par P 30, at P45 per share. How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off)
Martin Company issues $2,000,000, 6%, 5-year bonds on lanuary 1, Year 4. The bonds pay interest semiannually on June 30 and December 31. The market yleld for bonds of similar risk and maturity is 5% What is the total amount of interest Martin will pay bondholders if the bondholders hold the bonds until maturity? Select one O a $120,000 Ob $300,000 Oc $600,000 Od $500,000 O e None of these choices. Of. $100,000
NoleCo issues bonds on January 1, 20X1. The bonds mature ten years from this date and pay interest semi-annually on June 30 and December 31 each year. The face value of the bonds is $800,000 and the coupon/stated rate is 10%. The market rate on the issue date is 11%. The bonds were issued for $752,198.Required: Complete the three parts below.Part A: The interest expense that NoleCo should recognize on June 30, 20X1 is:$40,000$44,000$37,610$42,112$41,371Part B: The interest expense that NoleCo should recognize on December 31, 20X1 is:$41,295$41,446$40,000$42,206$44,000Part C: The carrying value of these bonds on December 31, 20X1 (after the interest payment on that date) is:$800,000$753,569$755,015$752,198$756,516
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…
Monty Corp. invested in a three-year, $100 face value 9% bond, paying $95.11. At this price, the bond will yield a 11% return. Interest is payable annually. Prepare a bond discount amortization table for Monty Corp., assuming Monty uses the effective interest method required by IFRS. (Round answers to 2 decimal places, e.g. 52.75.) Bond Discount Amortization Table Date Cash Received Interest Income Bond Discount Amortization Amortized Cost of Bond Day 1 $enter a dollar amount End Year 1 $enter a dollar amount $enter a dollar amount $enter a dollar amount enter a dollar amount End Year 2 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount End Year 3 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount $enter a total amount $enter a total amount $enter a total amount Prepare journal entries to record the initial…
Enviro Company issues 12.50%, 10-year bonds with a par value of $470,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 9.50%, which implies a selling price of 128.875. The straight-line method is used to allocate interest expense. 1. What are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of these bonds? 3. What is the amount of bond interest expense recorded on the first interest payment date? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What are the issuer's cash proceeds from issuance of these bonds? (Round your final answer to nearest whole dollar amount.) Cash proceeds
Enviro Company issues 11.00%, 10-year bonds with a par value of $310,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8.00%, which implies a selling price of 124.875. The straight-line method is used to allocate interest expense. 1. What are the issuer’s cash proceeds from issuance of these bonds?2. What total amount of bond interest expense will be recognized over the life of these bonds?3. What is the amount of bond interest expense recorded on the first interest payment date?
ABC Company issued a 3-year,12%, 2,000 of P 1,000 face value bonds with warrants at 98 on January 1, 2020. The nominal rate is payable annually on December 31. When the bonds are issued, the prevailing market rate of interest for similar bonds without warrants is 15% per annum. Each bond is accompanied by a warrant that permits the bondholder to purchase 20 shares of common stock, par P 30, at P45 per share. How much is the amount allocated to warrants to be recognized by ABC Company? (For present value factors, do not round off) 96,993.51 96,939.51 99,969.51 184,109.8
9. Sean Corp. issued a $40,000, 10-year bond, with a stated rate of 8%, paid semiannually. How much cash will the bond investors receive at the end of the first interest period? a.$1,600 b.$4,000 c.$3,200 d.$800
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.
On the first day of the fiscal year, a company issues a $8,500,000, 6%, 5-year bond that pays semiannual interest of $255,000 ($8,500,000 \times 6% \times (1)/(2)), receiving cash of $7,491, 128. Using straight - line amortization, journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
Haresh