Sunland Company issued $1,700,000, 15 year bonds. It arred to make annual depesits of $79,000 to a fund (called asinking fund: Which will be used to pry off the principal amount of the bend at the end of 15 yars. The deposits are madeat the send of ach year into an rccount prying 5K annual interest. Clickhers tovisw the factor table. toble provided. Roundanawer to 2 decinal place, es. 25.25. Amount in ths sinking fund $

The objective of the question is to calculate the amount in the sinking fund at the end of 15 years.…

Answered: Sunland Company issued $1,700,000, 15…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hw.5.
Thompson Distributors sold $50,000 worth of bonds to raise money for a new warehouse. The bonds pay interest annually at 4% for 10 years. The market rate of interest for a similar instrument was 3%; therefore, the bonds sold for a premium at $54,265. a. Record the sale of the bonds. b. Record the first interest payment and the amortization of the bond premium. Round the interest to the nearest dollar. c. Determine the carrying value (book value) of the bonds after the first year. General Journal Date Account Debit Credit a. b.
On January 1, 2012 Zesto Company received $1,032,880 for $1,000,000 face amount, 12% bonds, a price that yields 10%. Interest is payable semi-annually every June 30 and December 31. Interest expense for the year ended December 31, 2012 is a.$123,946 b.$120,000 c.$103,288 d.$102,870
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.
HodsonCorp. purchased ten $1,000 8% bonds of Eagle Corporation when the market rate of interestwas 6%. Interest is paid semiannually, and the bonds will mature in four years. Using the PVfunction in Excel®, compute the price Hodson paid (the present value) for the bond investment.
3. A company issued 100 bonds of₱1,000 face value each, redeemable at par at the end of 15 years. To accumulate the funds for redemption, the firm established a sinking fund consisting of annual deposits, the interest rate of the fund is 5%. What was the principal in the fund at the end of the 12thyear?
Hodson Corp. purchased fifteen $1,000 3% bonds of Power Source Corporation when the market rate of interest was 10%. Interest is paid semiannually, and the bonds will mature in eight years. Using the PV function in Excel, compute the price Hodson paid (the present value) for the bond investment. (Assume that all payments of interest and principal occur at the end of the period. Round your answer to the nearest cent.) Hodson paid on the bond investment.
At the end of the year, the company purchased as a long-term investment P 10,000, 10% bonds to yield 8% per year. The bonds mature on January 1, five years after, and pay interest semiannually on June 30 and December 31. The present value factors are as follows: Present value of 1 at 4% for 10 periods 0.6756 Present value for an ordinary annuity at 4% for 10 periods 8.11 Present value of 1 at 5% for 10 periods 0.6139 Present value for an ordinary annuity at 5% for 10 periods 7.72 The carrying amount of this investment at year end is
a corporation sold an issue of 15 years bonds having a total face value of 12,000,000 for 11,000,000. the bond bear interest 15% payable semiannually . the company wishes to established a sinking fund for retiring the bond issue and will make semiannual deposit that will earn 12% compunded seminuannually. show the cash flow diagram and compute the annual costfor interest and redemption of these bond.
Oak Branch Inc. issued $900,000 of 5%, 10-year bonds when the market rate was 4%. They received $973,595. Interest was paid semi-annually. Prepare an amortization table for the first three years of the bonds. Round intermediate and final answers to whole dollar amount. Jan. 1, Year 1 June 30, Year 1 Dec. 31, Year 1 June 30, Year 2 Dec. 31, Year 2 June 30, Year 3 Dec. 31, Year 3 Cash Interest Payment ✔ 22,500 22,500 ✓ 22,500 ✔ 22,500 ✔ 22,500 ✓ 22,500 ✓ Interest on Carrying Value 19,472 19,411 V ✓ 19,350 ✔ 19,287 ✔ 19,222 ✔ 19,157 ✔ Amortization of Premium 3,028 3,089 3,150 ✔ ✓ 3,213 3,278 ✓ 3,343 ✔ Carrying Value 973,595 970,567 967,478 ✔ 964,328 ✔ 961,114 X 957,837 ✔ 954,493 X
Sepia Inc. issued $350,000 bonds that were redeemable in 7 years. They established a sinking fund that was earning 5.50% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made into the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposits. b. Calculate the sinking fund balance at the end of the 4th payment period. c. Calculate the amount of interest earned during the 5th payment period. d. Calculate the amount by which the sinking fund increased in the 5th payment period.
Blossom Company issued $700,000, 9-year bonds. It agreed to make annual deposits of $75,500 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 9 years. The deposits are made at the end of each year into an account paying 4% annual interest. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 9 years? (Round answer to 2 decimal places, e.g. 25.25.) Amount in the sinking fund $ 803100.94

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