### Present Value of Bonds Payable: DiscountPinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $25,000,000 of 5-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%.**Task:**Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.**Answer Box:***$ __________* [Input Field]**Incorrect Indicator:***X* [Red Cross Symbol]**Explanation:**- **Present Value Calculation:** - Determine the semiannual interest payment by dividing the annual interest rate by two and applying it to the bond's face value. - Using the present value tables (Exhibit 5 for the present value of $1 and Exhibit 7 for the present value of an ordinary annuity of $1), find the factors for 5 years at a semiannual effective interest rate of 4.5%. - Apply these factors to calculate the present value of the bond's interest payments and principal repayment.Note: Specific tables (Exhibit 5 and Exhibit 7) should be referred to carry out the exact computations. These tables are typically found in financial textbooks or supplementary educational materials.

Solution:Present value of bonds payable is issue price of bond computed using discount periodic…

Answered: Pinder Co. produces and sells…

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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Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. Feedback Check My Work Remember, the selling price of a bond is the sum of the present values of the face amount of the bonds due at the maturity date and the periodic interest to be paid on the bonds, The market rate of interest is used to compute the present value of both the face amount and the periodic interest.
1. On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%.The bonds paid interest semi-annually. Assuming the bonds sold at 58.55, what was the selling price of thebonds? Explain why the cash received from selling this bond is different from the $200,000 face value of thebond
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Hw.5.
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…
Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $30,000,000 of four-year, 9% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Determine the present value of the bonds payable. Round your answer to the nearest dollar.
shobha
Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd issued $74,000,000 of three-year, 9% bonds at a market (effective) interest rate of 13%, with interest payable semiannually. The amount of cash proceeds from the sale of the bonds. Round your answer to the nearest dollar. $ fill in the blank 2 The amount of discount to be amortized for the first semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. $ fill in the blank 3 The amount of discount to be amortized for the second semiannual interest payment period, using the interest method. Round your answer to the nearest dollar. $ fill in the blank 4 The amount of the bond interest expense for the first year. Round your answer to the nearest dollar. $ fill in the blank 5
Pronghorn Corporation issues $590,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Click here to view factor tables. Compute the issue price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O

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