rporation sold an issue of 20 year bonds, having a total face value of P10 Million pesos for P9.5 Million pesos. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn12%, compounded semi annually. Compute the annual cost for interest and redemption of these bonds.

rporation sold an issue of 20 year bonds, having a total face value of P10 Million pesos for P9.5 Million pesos. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn12%, compounded semi annually. Compute the annual cost for interest and redemption of these bonds.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6MC: On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest...

See similar textbooks

Similar questions

On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
A Corporation sold an issue of 20-year bonds, having a total face value of 22M for 9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds.
4. Compute the annual cost for interest and redemption of these bonds
A corporation sold an issue of 20-year bonds, having a total face value of P10,000,000 for P9,500,000. The bonds bear interest at 16%, payable semiannually. The company wishes to establish a sinking fund for retiring the bond 1. issue and will make semiannual deposits that will earn 12%, compounded semiannually. Compute the annual cost for interest and redemption of these bonds. 2. A company has issued 10-year bonds, with a face value of P1,000,000 in P1,000 units. Interest at 16% is paid quarterly. If an investor desires to earn 20% nominal interest on P100,0000 worth of these bonds, what would the selling price have to be? 3. A P1,500-bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at
Unleaded Inc. issued a ₱300,000 face value bonds. It carries 10% annual interest rate to be repaid after 10 years. The corporation issued the bonds at ₱319,251 when the market rate was at 9%. Using the effective interest method of amortization, the journal entry at the end of the year will include a) A credit to Discount on Bonds Payable for ₱1,267. b) A credit to Premium on Bonds Payable for ₱1,267 c) A debit to Discount on Bonds Payable for ₱1,267. d)
At the beginning of the current year, QUATRO Company purchased 5-year bonds with a face amount of ₱ 2,250,000 at a stated interest of 10% per year payable semi-annually every January 1 and July 1. The bonds were acquired to yield 8%. The present value of an annuity of 1 for 10 periods at 5% is 7.72; present value of an annuity of 1 for 10 periods at 4% is 8.11; present value of 1 for 10 periods at 4% is .676; present value of 1 for 10 periods at 5% is .614; present value of 1 for 5 periods at 10% is .621; present value of 1 for 5 periods at 8% is .681. What is the market or purchase price of the bonds upon acquisition?
A corporation floats ₱1,200,000 worth of bonds of ₱500 denomination. The bond rate is 9% and the bonds are to be retired in 10 years, the annual payment being nearly as equal as possible. Prepare an amortization schedule. Solve and show the solution.
A corporation issues $3,000,000 of 8%, 10-year bonds, interest payable semiannually. At the time the bonds are issued, the market rate is 12%. Determine the present value of bonds at issuance using the present value table below. Show computations in good form. Present Value of Principal: PV of annuity: PV of Bond Payable=
Sheridan Industries, Inc. issued $17,400,000 of 8% debertures on May 1, 2024 and received cash totaling $15,438,373. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2028. The firm uses the effective- interest method of amortizing discounts and premiums. The bonds were sold to yield an effective rate of 10%. Calculate the total dollar amount of discount or premium amortization during the first year (5/1/24 through 4/30/25) these bonds were outstanding. (Round answers to O decimal places, e.g. 5,275.) Date 5/1/24 11/1/24 5/1/25 Total $ Cash Interest Interest Expense tA $ $ Discount Amortized $ Carrying Value of Bon
Sunland Company issued $1,700,000, 15 year bonds. It arred to make annual depesits of $79,000 to a fund (called a sinking fund: Which will be used to pry off the principal amount of the bend at the end of 15 yars. The deposits are made at the send of ach year into an rccount prying 5K annual interest. Clickhers tovisw the factor table. toble provided. Round anawer to 2 decinal place, es. 25.25. Amount in ths sinking fund $
Gold Corp. uses the amortized cost method (effective interest method) when accounting for debt investments. During the year, it purchased$140,000of 4-year,8%bonds, when the market interest rate was10%. 1. Calculate the price of the bond. Assume the bonds paid interest annually. 2. Record the purchase of the bonds on July1,2021. And accrual of interest on December 31, 2021. And receipt of interest on July 1, 2022. 3 What is the bond's carrying value on December31,2022?
Williams Company issued $600,000 of 10%, 5-year bonds. Interest is paid semiannually, and the straight-line method is used for amortization. Assume that the market rate for similar investments is 12% and the bonds are issued on an interest date. What amount was received for the bonds? (round to nearest dollar) PRESENT VALUE OF $1 If n=5 and interest = 10%, then use the factor 0.62092 %3D But, if n=10 and interest = 6%, then use the factor 0.55839 %3D PRESENT VALUE OF ANNUITY $1 If n=5 and interest = 10%, then use the factor 3.79079 But, if n=10 and interest = 6%, then use the factor 7.36009 %3D O $486,276 O $600,000 O $630,000 O $555,837