Problem #3: There is a bond on a company's books with an original term of 10 years that was purchased for a premium at its issuance, just over 2 years ago. The bond pays semi-annual interest. With the receipt of the latest coupon, the corresponding amount for amortization of the premium was $158.85. Exactly one year ago, the amount for amortization of the premium was $146.02. Based on the relation between subsequent amounts for amortization of the principal, what was the original value of the premium?

Problem #3: There is a bond on a company's books with an original term of 10 years that was purchased for a premium at its issuance, just over 2 years ago. The bond pays semi-annual interest. With the receipt of the latest coupon, the corresponding amount for amortization of the premium was $158.85. Exactly one year ago, the amount for amortization of the premium was $146.02. Based on the relation between subsequent amounts for amortization of the principal, what was the original value of the premium?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 3EA: Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the...

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2. Krystian Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. Calculate and explain the timing of the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. Would an investor be willing to pay more or less than face value for this bond?
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Novak Corporation issues $570,000 of 9% bonds that are due in 8 years and pay interest semi-annually. At the time of issue, the market rate for such bonds is 8%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Calculate the bonds' issue price by using (1) factor Tables A.2 and A.4, (2) a financial calculator, or (3) Excel function PV. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Issue price of bond $
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Please provide whole answer: A company has a bond outstanding. Bond A has a face value of $20,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $900 every six months over the subsequent eight years, and finally pays $1,300 every six months over the last six years. If the required return on this bond is 5.4% compounded semiannually, what is the current price of Bond A? What would be the price if the bond was compounded quarterly?
A 81.
Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. What is the amount of interest payments every 6 months? An investor would be willing to pay an amount (equal to, more than, less than) the face value for this bond. (pick one) The bonds were issued at (par, a discount, a premium).
When the market rate of interest was 12%, Halprin Corporation issued $334,000, 11%, 10-year bonds that pay interest annually. Use the present value tables below. The selling price of this bond issue was? Present Value of 1to Be Paid in the Future Present Value of a Series of 1 Paymentsto Be Paid in the Future Periods 5% 6% 7% 10% 1 0.95238 0.94340 0.93458 0.90909 2 0.90703 0.89000 0.87344 0.82645 3 0.86384 0.83962 0.81630 0.75132 4 0.82270 0.79209 0.76290 0.68301 5 0.78353 0.74726 0.71299 0.62092 6 0.74622 0.70496 0.66634 0.56447 7 0.71068 0.66506 0.62275 0.51316 8 0.67684 0.62741 0.58201 0.46651 9 0.64461 0.59190 0.54393 0.42410 10 0.61391 0.55840 0.50835 0.38554 Periods 11.0% 11.5% 12.0% 12.5% 1 0.90090 0.89686 0.89286 0.88889 2 0.81162 0.80436 0.79719 0.79012 3 0.73119 0.72140…
Question No. 3: The Garraty Company has two bond issues outstanding. Both bonds pay $100 annual interest plus $1,000 face value at maturity. Bond L has a maturity of 15 years, and Bond S has a maturity of 1 year. What will be the value of each of these bonds when the going rate of market interest is 8%? What will be the value of each of these bonds when the going rate of market interest is 12%. what can you conclude from the results of the above questions?
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