St. Clair Drums issued $100,000 of 8-year, zero-coupon debenture bonds on January 1 when the market yield was 6%. The bond agreement stated that compounding was semiannual. How much are the proceeds of the bond issue using Excel or a financial calculator? $100,000 $ 69,843 $ 50,160 $ 62,317

St. Clair Drums issued $100,000 of 8-year, zero-coupon debenture bonds on January 1 when the market yield was 6%. The bond agreement stated that compounding was semiannual. How much are the proceeds of the bond issue using Excel or a financial calculator? $100,000 $ 69,843 $ 50,160 $ 62,317

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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On January 1, 20X5, Seymond Corporation issued $100,000 in 10-year, zero-coupon bonds. The interest rate is 5% and Seymond uses the effective interest rate method."A. Record the issuance of the bonds. B. Record the interest accrual on December 31, 20X5. C. Record the interest accrual on December 31, 20X6. "
On March 1, Wayne Michaels bought 10 bonds from a particular company with a coupon rate of 9.725%. The purchase price was 89.875, and the commission was $7 per bond. Bonds from this particular company pay interest on February 1 and August 1. (a) What is the current yield (as a %) of the bond as of the purchase date? (Round your answer to one decimal place.) (b) What is the total purchase price (in $) of the bonds? (c) If Wayne sold the bonds on November 1 for 94.875, what are the proceeds (in $) from the sale?
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On March 1, Wayne Michaels bought 10 bonds from a particular company with a coupon rate of 9.625%. The purchase price was 89.875, and the commission was $8 per bond. Bonds from this particular company pay interest on February 1 and August 1. (a)What is the current yield (as a %) of the bond as of the purchase date? (Round your answer to one decimal place.) 10.7 % (b)What is the total purchase price (in $) of the bonds? (Round your answer to the nearest cent.) $ (c)If Wayne sold the bonds on November 1 for 94.875, what are the proceeds (in $) from the sale? (Round your answer to the nearest cent.) $
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On April 30, Year 6, Tuesday Ltd. issued $1,000,000 of 20-year bonds paying interest twice a year on October 31 and April 30. The coupon rate is 5%, and the market rate was 7%. The bonds were issued at 78.6449. Required a. Calculate the issue price. Round your numbers to the nearest dollar. b. Prepare a bond amortization table for the initial issue of the bonds and the first four interest periods. c. Using the net method, prepare journal entries for the issue of the bonds and the following: • Interest payment on October 31, Year 6⚫ Interest accrual, rounded to 2 months, on December 31, Year 6 ⚫ Interest payment on April 30, Year 7⚫ Interest payment on October 31, Year 7 • Interest accrual on December 31, Year 7
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On March 1, Wayne Michaels bought 10 bonds from a particular company with a coupon rate of 9.325%. The purchase price was 87.875, and the commission was $9 per bond. Bonds from this particular company pay interest on February 1 and August 1. (a)What is the current yield (as a %) of the bond as of the purchase date? (Round your answer to one decimal place.) (b) What is the total purchase price (in $) of the bonds? (Round your answer to the nearest cent.) (c) If Wayne sold the bonds on November 1 for 92.875, what are the proceeds (in $) from the sale? (Round your answer to the nearest cent.)
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