Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bing- bing at 96-1/2. Required: Assuming when the bond is offered to Pinky, it has a remaining life of 6 years. Pinky wants a 15% p.a. rate if return on her bond investment: Compute for the value of each bond? How much is the total value of the bonds offered to Pinky? Based on the offered price, what is the bond exact yield to maturity? Would you recommend to Pinky to buy the bonds? Why?

Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bing- bing at 96-1/2. Required: Assuming when the bond is offered to Pinky, it has a remaining life of 6 years. Pinky wants a 15% p.a. rate if return on her bond investment: Compute for the value of each bond? How much is the total value of the bonds offered to Pinky? Based on the offered price, what is the bond exact yield to maturity? Would you recommend to Pinky to buy the bonds? Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 9EA: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The...

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Smile Corp. Issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every four (4) months. On October 1, Hapi purchased 20 bonds at par. On May 31, she sold 8 bonds to Honey at 105-3/4. Again on September 30, Hapi sold another 6 bonds to Sweet at 96-1/2. Required: 1. Assuming when the bond is offered to Honey, it as a remaining life of 6 years. Honey wants a 15% p.a.rate of return on her bond investment: a. Compute for the value of each bond? How much is the total value of the bonds offered? b. Based on the offered price, what is the bond exact yield to maturity? c. Would you recommend to Honey to buy the bonds? Why?
Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bingbing at 96-1/2. Required: 1. Assuming when the bond is offered to Pinky, it has a remaining life of 6 years. Pinky wants a 15% p.a. rate if return on her bond investment: a. Compute for the value of each bond? How much is the total value of the bonds offeredto Pinky? b. Based on the offered price, what is the bond exact yield to maturity? c. Would you recommend to Pinky to buy the bonds? Why?
Pinas Corporation issued 16% p.a., 10-year Debenture bond, P6,000 face value, interest due every 4 months. On March 31, Fely purchased 20 bonds at par. On May 1, she sold 8 bonds to Pinky at 105-3/4. Again in September 30, Fely sold another 6 bonds to Bingbing at 96-1/2. Required: Assuming when the bond is offered to Bing-bing, it has a remaining life 4 years. Bingbing required rate of return for her bond investment is 18% p.a.: a. Compute for the value of each bond? How much is the total value of the bonds offered? b. Based on the offered price, what is the bond approximate yield to maturity? c. Would you recommend to Bing-bing to buy the bonds? Why?
show all necessary computation
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