Required information Skip to question [The following information applies to the questions displayed below.] Lemond Corporation is planning to issue bonds with a face value of $200,000 and a coupon rate of 10 percent. The bonds mature in three years and pay interestsemiannually every June 30 and December 31. All the bonds were sold on January 1 of this year. Lemond uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8.5 percent. (FV of S1, PV of S1. FVA of $1.and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 3. What bonds payable amount will Lemond report on this year's December 31 balance sheet? Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollaramount.

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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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Park Corporation is planning to issue bonds with a face value of $2,800,000 and a coupon rate of 7 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective - interest amortization method and also uses a premium account. Assume an annual market rate of interest of 6.0 percent. (FV of $1, PV of S1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. and 2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year 3. What bonds payable amount will Park report on its June 30 balance sheet?
Assume Walmart issued $1,000 10-year bonds. The bonds sold for $924 and pay interest semiannually. The required rate of return (semi-annual effective rate) for the bonds is .03. What is the bond’s coupon rate, reported as an APR compounded semi-annually? Instruction: Round to three decimal places. E.g., if your answer is 0.0106465 or 1.06465%, you should type ONLY the number .011, neither 0.0106465, 0.0106, nor 1.065.
Hartford Research issues bonds dated January 1 that pay interest semiannually on June 30 and December 31. The bonds have a $39,000 par value and an annual contract rate of 8%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) Note: Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations. Required: Consider each separate situation. 1. The market rate at the date of issuance is 6%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 2. The market rate at the date of issuance is 8%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their issuance. 3. The market rate at the date of issuance is 10%. (a) Complete the below table to determine the bonds' issue price on January 1. (b) Prepare the journal entry to record their…
! Required information [The following information applies to the questions displayed below.] Cron Corporation is planning to issue bonds with a face value of $840,000 and a coupon rate of 13 percent. The bonds mature in five years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Cron uses the effective-interest amortization method. Assume an annual market rate of interest of 12 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) 2. What amount of interest expense should be recorded on June 30 and December 31 of this year? (Round your final answers to nearest whole dollar amount.) Interest expense June 30 December 31
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The bonds mature in 10 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds?2. How many semiannual interest payments will be made on these bonds over their life?3. Use the interest rates given to select whether the bonds are issued at par, at a discount, or at a premium.4. Compute the price of the bonds as of their issue date.5. Prepare the journal entry to record the bonds’ issuance.
The following information applies to this question: Johnson Corporation plans to obtain financing with a $1,000,000 bond issue that has a term of 10 years. Payments wilI be made semi-annually. if the bond (payment) rate is stated at 7%, and the bonds call for semi-annual payments, what is the amount of those payments? O a. $350,000 O b. $70,000 OC. $35,000 d. $700,000
On January 1, 2024, Christmas Anytime issues $850,000 of 6% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Assume that the market interest rate is 7% and the bonds issue at a discount.2a. Calculate the issue price of a bond.2b. Complete the first three rows of an amortization schedule. (FV of $1, PV of $1, FVA of $1, and PVA of $1)
Enviro Company issues 8%, 10-year bonds with a par value of $340,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. 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 total amount of bond interest expense will be recognized over the life of these bonds? Note: Round final answers to the nearest whole dollar amount. Total Bond Interest Expense Over Life of Bonds: Amount repaid: 20 payments of Par value at maturity $ 13,600 $ Total repayments Less amount borrowed (cash proceeds from part 1) Total bond interest expense < $ Required…
Serotta Corporation is planning to issue bonds with a face value of $440,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) 1. Provide the journal entry to record the issuance of the bonds January 1.
ABC Inc. plans to issue $500,000 face value bonds with a stated interest rate of 12% and market interest rate of 10%. They will mature in 10 years. Interest will be paid semiannually. At the date of issuance, compute the present value (bond issue price) of the future cash flows. Following are appropriate factors from tables:
NoleCo issues bonds on January 1, 20X2. 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 $500,000 and the coupon/stated rate is 8%. The market rate on the issue date is 7%. The bonds were issued for $535,531. Required: Complete the three parts below. Part A: The interest expense that NoleCo should recognize on June 30, 20X2 is: $20,000 $17,500 $18,744 $18,826 $21,421 Part B: The interest expense that NoleCo should recognize on December 31, 20X2 is: $18,686 $20,000 $18,788 $18,700 $17,500 Part C: The carrying value of these bonds on December 31, 20X2 (after the interest payment on that date) is: $533,248 $502,556 $500,000 $538,087 $532,975
Quatro issues bonds dated January 1, 2021, with a par value of $900,000. The bonds' annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and there was bonds Issuance costs of $29, 850 1. What is the price of these bonds at issuance? 2. Prepare the journal entries to record how much total bond interest expense will be recognized over the life of these bonds and the Bond issuance costs 3 Prepare an amortization table for these bonds using the effective interest method.

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