[The following information applies to the questions displayed below.] Temptation Vacations issues $49 million in bonds on January 1, 2024, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) Date 1/1/2024 6/30/2024 12/31/2024 (2) Cash Paid for Interest $1,470,000 1,470,000 Market annual interest rate (3) Interest Expense $1,378,755 1,376,473 (4) Decrease in % Carrying Value $91,245 93,527 (5) Carrying Value $55,150, 180 5. What is the market annual interest rate? (Round your answer to the nearest whole percent.) 55,058,935 54,965,408

[The following information applies to the questions displayed below.] Temptation Vacations issues $49 million in bonds on January 1, 2024, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) Date 1/1/2024 6/30/2024 12/31/2024 (2) Cash Paid for Interest $1,470,000 1,470,000 Market annual interest rate (3) Interest Expense $1,378,755 1,376,473 (4) Decrease in % Carrying Value $91,245 93,527 (5) Carrying Value $55,150, 180 5. What is the market annual interest rate? (Round your answer to the nearest whole percent.) 55,058,935 54,965,408

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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[The following information applies to the questions displayed below.] Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of a straight-line amortization table. 5. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Req 1 Req 2A to 2C Req 3 Req 4 Req 5 Prepare the…
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,095,749 1 228,000 243,830 15,830 6,111,579 2 228,000 244,463 16,463 6,128,042 3 228,000 245,122 17,122 6,145,164 4 228,000 245,807 17,807 6,162,971 5 228,000 246,519 18,519 6,181,490 6 228,000 247,260 19,260 6,200,750 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 228,000 295,564 67,564 7,456,656 39 228,000 298,266 70,266 7,526,922 40 228,000 301,078 73,078 7,600,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity? What is the total effective interest…
3. On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable semi-annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable PLEASE NOTE: For each of the following journal entries there is one account's treatment (DR or CR), that depends on whether it is a bond issued at a premium or a discount. You are to identify if it is a DR or a CR. You must enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345). July 1, 2018: to record issuing the bonds DR DR/CR ? CR Dec. 31, 2018: to record the amortization & payment of interest to bondholders: DR…
The following section is taken from Crane's balance sheet at December 31, 2024. Current liabilities Interest payable Long-term liabilities Bonds payable (9%, due January 1, 2028) (a) (b) $41,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (c) 510,000 Journalize the payment of the bond interest on January 1, 2025. Assume that on January 1, 2025, after paying interest, Crane calls bonds having a face value of $105,000. The call price is 105. Record the redemption of the bonds. Prepare the adjusting entry on December 31, 2025, to accrue the interest on the remaining bonds.
On January 1, 2024, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment Cash Payment Effective Interest Increase in Balance Outstanding Balance 6,627,273 1 320,000 331,364 11,364 6,638,637 2 320,000 331,932 11,932 6,650,569 3 320,000 332,528 12,528 6,663,097 4 320,000 333,155 13,155 6,676,252 5 320,000 333,813 13,813 6,690,065 6 320,000 334,503 14,503 6,704,568 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 320,000 389,107 69,107 7,851,247 39 320,000 392,562 72,562 7,923,809 40 320,000 396,191 76,191 8,000,000 Required: What is the face amount of the bonds? What is the initial selling price of the bonds? What is the term to maturity in years? Interest is determined by what approach? What is the stated annual interest rate? What is the effective annual interest rate? What is the total cash interest paid over the term to maturity?…
How do you solve portion B and C. I don't understand the calcuations.
Temptation Vacations issues $58 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: (1) (2) (3) (4) (5) Cash Paid for Interest Interest Expense Decrease in Carrying Value Carrying Value Date 1/1/2021 $65,279,805 6/30/2021 $1,740,000 1,631,995 $108,005 $65,279,805 12/31/2021 1,740,000 1,629,295 $110,705 65,171,800 6. What is the total cash paid for interest assuming the bonds mature in 20 years? (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000)) Total cash interest
Discount-Mart issues $12 million in bonds on January 1, 2024. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date 01/01/2024 06/30/2024 12/31/2024 06/30/2025 12/31/2025 Interest Expense $600,000 $637,417 HIT 639,662 642,041 644,564 Cash Paid 600,000 600,000 Increase in Carrying Value 600,000 $37,417 39,662 42,041 44,564 Carrying Value $10,623,609 10,661,026 10,700,688 10,742,729 10,787,293 What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.)
answer in text form please (without image
Lopez Plastics Company (LPC) issued callable bonds on January 1, 2024. LPC's accountant has projected the following amortization schedule from issuance until maturity: Date Cash interest Effective interest Decrease in balance Outstanding balance 1/1/2024 $207,020 6/30/2024 $7,000 $6,211 $789 206,230 12/31/2024 7,000 6,187 813 205,417 6/30/2025 7,000 6,163 837 204,580 12/31/2025 7,000 6,137 863 203,717 6/30/2026 7,000 6,112 888 202,829 12/31/2026 7,000 6,085 915 201,913 6/30/2027 7,000 6,057 943 200,971 12/31/2027 7,000 6,029 971 200,000 What is the annual effective interest rate on the bonds?
Aggies Inc. issued bonds with a $450,000 face value, 8% interest rate, and a 4-year term on July 1, 2018, and received $510,000. Interest is payable semi-annually. The premium is amortized using the straight-line method. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 B. fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 C.
Ivanhoe Corporation has issued three different bonds during 2024. Interest is payable annually on each of these bonds. (a) Your answer is partially correct. On January 1, 2024, Ivanhoe issued 1,050, 8%, 5-year, $1,000 bonds dated January 1, 2024, at face value. Prepare the journal entry to record the bond transaction at the date of issue. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles Debit Credit Jan. 1 Cash Bonds Payable

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