Requlred Information [The following information applies to the questions displayed below.) On January 1, 2021, Wild Rapids Water Park issues $39.1 million of 9% bonds to finance expansion. The bonds are due in 20 years, with interest payable semiannually on June 30 and December 31 each year. 2-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use approprlate factor(s) fron ables provided. Do not round Interest rate factors. Enter your answers In dollars not In mlons. Round "Market Interest rate" decimal place. Round your final answers to the nearest whole dollar.) Bond Chara Amount Face amount 30,100,000 Interest payment Periods to maturity Market interest rate Issue price 2-b. The bonds will issue at OA Discount
Requlred Information [The following information applies to the questions displayed below.) On January 1, 2021, Wild Rapids Water Park issues $39.1 million of 9% bonds to finance expansion. The bonds are due in 20 years, with interest payable semiannually on June 30 and December 31 each year. 2-a. If the market rate is 9%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use approprlate factor(s) fron ables provided. Do not round Interest rate factors. Enter your answers In dollars not In mlons. Round "Market Interest rate" decimal place. Round your final answers to the nearest whole dollar.) Bond Chara Amount Face amount 30,100,000 Interest payment Periods to maturity Market interest rate Issue price 2-b. The bonds will issue at OA Discount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
thank you!
![### Required Information
**[The following information applies to the questions displayed below.]**
On January 1, 2021, Wild Rapids Water Park issues $39.1 million of 9% bonds to finance expansion. The bonds are due in 20 years, with interest payable semiannually on June 30 and December 31 each year.
### 2-a. Bond Issue Price Calculation
If the market rate is 9%, calculate the issue price using the present value formulas for $1.00:
- FV of $1 (Future Value of $1)
- PV of $1 (Present Value of $1)
- FVA of $1 (Future Value Annuity of $1)
- PVA of $1 (Present Value Annuity of $1)
**Instructions:**
- Use appropriate factors from the tables provided.
- Do not round interest rate factors.
- Enter your answers in dollars, not in millions.
- Round the "Market interest rate" to 1 decimal place.
- Round final answers to the nearest whole dollar.
**Bond Characteristics Table:**
| Bond Characteristics | Amount |
|--------------------------|---------------|
| Face amount | $39,100,000 |
| Interest payment | |
| Periods to maturity | |
| Market interest rate | |
| Issue price | |
### 2-b. Bond Issue Outcome
Determine the outcome of the bond issuance:
- The bonds will issue at:
- ☐ A Discount
- ☐ A Premium
- ☐ Face amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c03d17e-03c0-44bf-860a-ef4a718bf31e%2F1a04facd-cc3b-4ac2-a47d-5583d15602d1%2Fu82opwh_processed.png&w=3840&q=75)
Transcribed Image Text:### Required Information
**[The following information applies to the questions displayed below.]**
On January 1, 2021, Wild Rapids Water Park issues $39.1 million of 9% bonds to finance expansion. The bonds are due in 20 years, with interest payable semiannually on June 30 and December 31 each year.
### 2-a. Bond Issue Price Calculation
If the market rate is 9%, calculate the issue price using the present value formulas for $1.00:
- FV of $1 (Future Value of $1)
- PV of $1 (Present Value of $1)
- FVA of $1 (Future Value Annuity of $1)
- PVA of $1 (Present Value Annuity of $1)
**Instructions:**
- Use appropriate factors from the tables provided.
- Do not round interest rate factors.
- Enter your answers in dollars, not in millions.
- Round the "Market interest rate" to 1 decimal place.
- Round final answers to the nearest whole dollar.
**Bond Characteristics Table:**
| Bond Characteristics | Amount |
|--------------------------|---------------|
| Face amount | $39,100,000 |
| Interest payment | |
| Periods to maturity | |
| Market interest rate | |
| Issue price | |
### 2-b. Bond Issue Outcome
Determine the outcome of the bond issuance:
- The bonds will issue at:
- ☐ A Discount
- ☐ A Premium
- ☐ Face amount
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education