The following table lists several corporate bonds issued during a particular quarterGeneral GoldmanElectricBank ofWellsCompanyATATVerizonAmericaSachsFargoTime toMaturity(years)1010Annual2.403.004.255.154.507.15Rate (%)Would Bank of America or Verizon pay the most total interest on a $4,000 bond at maturity? How much interest would that be?Bank of America would pay $in interest on a $4,000 bond at maturity. Verizon would pay $in interest on a $4,000 bond atmaturity. So, we seeSelectO would pay the most interest on $4,000 bond at maturity.

Interest=Principal×Rate×Time100

Answered: The following table lists several…

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Bonds sold at Premium: Use the following information for Problems #4 - #6: Summatra Corporation issued $1,200,000 of five year 8% term bonds on January 1, 2012 with interest payable twice annually (each July 1 and January 1). The market rate of interest for such bonds is 6%. Record the journal entry on Summatra's for issuance of the bonds:
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q6 Sun Corp. markets a 10-year bond issue dated January 1, 2018. The bonds pay interest semiannually on January 1 and July 1. If these bonds are sold on August 1, 2018, how many months accrued interest must be paid by the purchaser and over how many months would any discount on the bonds be amortized?A. Accrued interest- 7 month; Amortization period- 120 monthsB. Accrued interest- 7 month; Amortization period- 113 monthsC. Accrued interest- 1 month; Amortization period- 120 monthsD. Accrued interest- 1 month; Amortization period- 113 months
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Determining Selling Prices of Bonds Under Different Interest Assumptions Olay Inc. issues $50,000, 8%, 10-year bonds payable on January 1. Calculate the selling price of the bonds under the following separate assumptions. Round your answer to the nearest whole number. Do not use negative signs with your answers. a. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 10%. b. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 8%. c. The bonds pay cash interest annually ($4,000) and the market rate of interest on similar bonds is 6%. d. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds is 10%. e. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds is 8%. f. The bonds pay cash interest semiannually ($2,000) and the market rate of interest on similar bonds…
What account would be debited (1), what account would be credit (2), and what amount would be paid to record the journal entry for each interest payment based on a $200,000 five-year, 10% bond and the bond was issued at $192,462 (11%) and interest is paid semiannually? JOURNAL Page 25 DATE DESCRIPTION P.REF. DEBIT CREDIT (1) ? (2) ? (1) Interest Expense debit $11,000, and (2) Cash credit $11,000 (1) Interest Expense debit $10,000 and (2) Cash credit $10,000 (1) Cash debit $20,000 and (2) Interest Expense credit $20,000 (1) Cash debit $22,000, and (2) Interest Expense credit $22,000
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2. Deccan Corporation issued 10% 1,000,000 bond on January 1.2011 The market rate of interest is 12% Interest is paid semi annual The term of the bond is 5 years. V. How much would an investor pay for this bond? VI. Make Journal entries to record the receipt of cash from the sale of the bond in Deccan Corporations books VII. Amortize the bond discount over the term of bond using a. Straight line Method b. interest rate method VIII. Make Journal entries to record the payment of interest on 31 December 2011.
The following table lists several corporate bonds issued during the second quarter of 2015. Company AT&T Bank of America General Electric Goldman Sachs Verizon Wells Fargo Time to Maturity (years) 10 10 2 3 87 Annual Rate (%) 3.40 4.00 5.25 6.15 5.15 3.50 If you spent $20,000 on General Electric bonds, how much interest would you earn every 6 months? HINT [See Example 3.] $ 2100 Incorrect: Your answer is incorrect. How much interest would you earn over the life of the bonds? $ 25
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