### Issue PriceThe following terms relate to independent bond issues:- **a.** 610 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments- **b.** 610 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments- **c.** 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments- **d.** 1,880 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest paymentsUse the appropriate present value table:- [PV of $1](#)- [PV of Annuity of $1](#)#### Required:Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar.| Situation | Selling Price of the Bond Issue ||-----------|--------------------------------|| **a.** | $563,752 || **b.** | $562,897 || **c.** | || **d.** | | ### Issue PriceWhitworth International plans to issue $400,000 face value bonds with a stated interest rate of 10%. They will mature in 5 years. Interest will be paid semiannually. At the date of issuance, assume that the market rate is (a) 10%, (b) 8%, and (c) 12%.#### Use the appropriate present value table:- [PV of $1](#)- [PV of Annuity of $1](#)#### Required:For each market interest rate, answer the following questions. Round calculations and answers to the nearest whole dollar. Due to differences in rounding when using the present value factors, you need to round your answer for the ISSUE PRICE in the first column only to the nearest 100.#### Market Rate Table:| | 10% | 8% | 12% ||---|-----|----|------|| **1. What is the amount due at maturity?** | $400,000 | $400,000 | $400,000 || **2. How much cash interest will be paid every six months?** | $20,000 | $20,000 | $20,000 || **3. At what price will the bond be issued?** | $ | $ | $ |1. **What is the amount due at maturity?** - For all market rates, the face value of $400,000 will be due at maturity.2. **How much cash interest will be paid every six months?** - For all market rates, the semiannual cash interest payment will be $20,000 (calculated as $400,000 * 10% / 2).3. **At what price will the bond be issued?** - This requires calculating the present value of the bond's cash flows (interest and principal) at each market rate.Please refer to the provided present value of $1 and present value of annuity of $1 tables to compute the respective amounts. To find the issue price, you need to sum the present value of the interest payments and the present value of the maturity amount, discounted at the respective market rates.

The following terms relate to independent bond issues: a. 610 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments b. 610 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments c. 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments d. 1,880 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue а. 563,752 b. 562,897 C. d.

The following terms relate to independent bond issues: a. 610 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments b. 610 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments c. 800 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments d. 1,880 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar. Situation Selling Price of the Bond Issue а. 563,752 b. 562,897 C. d.

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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Granville Company issued a $6,300,000 in 8%, 10-year bonds when the market rate of interest is 10%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the issue price of Granville's the bond. (Round your final answer to nearest whole dollar.) Bond issue price
4
On January 1, Year 1, Sheffield Company issued bonds with a face value of $480,000, a term of ten years, and a stated interest rate of 7%. The bonds were issued at 106, and interest Sheffield uses the straight-line method amortize bond discounts and premiums. What is the carrying value of the bonds at December 31, Year 4? Multiple Choice O O OO $497,280 $480,000 $491,520 $494,400 payable each December 31.
Requirement 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest whole dollar.) 1. Determine the present value of 10-year bonds payable with face value of $93,000 and stated interest rate of 12%,paid semiannually. The market rate of interest is 12%at issuance. 2. Same bonds payable as in Requirement 1, but the market interest rate is 16%. 3. Same bonds payable as in Requirement 1, but the market interest rate is 8%.
Am. 389.
issued $ 480,000 of 4%, 10-year bonds payable at a price of 94. The market interest rate at the date of issuance was 5%, and the bonds pay interest semiannually. The journal entry to record the first semiannual interest payment using the effective interest amortization method is?
The following terms relate to independent bond issues: 460 bonds; $1,000 face value; 8% stated rate; 5 years; annual interest payments 460 bonds; $1,000 face value; 8% stated rate; 5 years; semiannual interest payments 830 bonds; $1,000 face value; 8% stated rate; 10 years; semiannual interest payments 1,890 bonds; $500 face value; 12% stated rate; 15 years; semiannual interest payments Use the appropriate present value table: PV of $1 and PV of Annuity of $1 Required: Assuming the market rate of interest is 10%, calculate the selling price for each bond issue. If required, round your intermediate calculations and final answers to the nearest dollar.
The project of the sister company is 7.000.000 TL. The company will earn 3.7 million TL in the first year from this project and for 15 years, and this amount will continue to decrease by 350,000 TL each year. If interest=30%, should this project be entered?
8. A corporation issues for cash $1,000,000 of 8%, 20-year bonds, interest payable annually, at a time when the market rate of interest is 7%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true? A. The carrying amount increases from its amount at issuance date to $1,000,000 at maturity. B. The carrying amount decreases from its amount at issuance date to $1,000,000 at maturity. C. The amount of annual interest paid to bondholders increases over the 20-year life of the bonds. D. The amount of annual interest expense decreases as the bonds approach maturity.
Hw.89.
Present entries to record the selected transactions described below: a. Issued $2,750,000 of 10-year, 8% bonds at 97. If an amount box does not require an entry, leave it blank. b. Amortized bond discount for a full year, using the straight-line method. If an amount box does not require an entry, leave it blank. c. Called bonds at 98. Assume the bonds were carried at $2,692,250 at the time of the redemption. If an amount box does not require an entry, leave it blank.
H1.

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