William Brown Company sells 8% bonds having a maturity value of $1,550,000 for $1,432,484.00. The bonds are dated January 1,2025, and mature January 1, 2030. Interest is payable annually on January 1.Click here to view factor tables.(a)Determine the effective-interest rate. (Round present value factor to 5 decimal places, e.g. 1.25124 and final answer to O decimalplaces, e.g. 18%.)The effective-interest rate%

The objective of the question is to determine the effective interest rate of the bonds sold by…

Answered: William Brown Company sells 8% bonds…

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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On December 31, 2024, when the market interest rate is 8%, McMann Realty issues $700,000 of 5.25%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance. (Round all currency amounts to the nearest whole dollar) (Click the icon to view Present Value of $1 table.) (Click the icon to view Future Value of $1 table.) The present value of the bonds at issuance amounts to (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of Ordinary Annuity of $1 table.) EXE
Paul White Company sells 10% bonds having a maturity value of $1,900,000 for $1,763,025. The bonds are dated January 1, 2025, and mature January 1, 2030. Interest is payable annually on January 1. Click here to view factor tables. Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 2 decimal places, e.g. 38,548.25.)
On March 1, 2021, JebaMac Company issued 7% term bonds with a face amount of P2,000,000 due March 1, 2025. Interest is payable semiannually on September 1 and March 1. On the date of issue, the effective interest rate is 6%. Round off PV factors to 4 decimals. Assuming the bonds were retired on June 30, 2021 at 102, inclusive of any accrued interest, what is the gain or (loss) on retirement of bonds?
Auerbach Inc. issued 8% bonds on October 1, 2021. The bonds have a maturity date of September 30, 2031 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2022. The effective interest rate established by the market was 10%. How much cash interest does Auerbach pay on March 31, 2022? (Round your answer to 2 decimal places.) Top of Form Multiple Choice $24.00 million. $12.00 million. $30.00 million. $15.00 million.
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Pearl Company sells 9% bonds having a maturity value of $1,610,000 for $1,435,895. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to 0 decimal places, e.g. 38,548.) Year Jan. 1, 2020 Jan. 1, 2021 Jan. 1, 2022 Jan. 1, 2023 Jan. 1, 2024 Jan. 1, 2025 LA Cash Paid INI $ LA Schedule of Discount Amortization Straight-Line Method Interest Expense LLLLLL $ Discount Amortized Carryi Amount of
Your answer is partially correct. Swifty Ltd. issued a $1,184,000, 10-year bond dated January 1, 2023. The bond was sold to yield 12% effective interest. The bond paid 10% interest on January 1 and July 1 each year. The company's year-end was December 31, and Swifty followed IFRS. Using 1. factor Tables 2. a financial calculator, or 3. Excel function PV, calculate the amount received for the bond, and any discount or premium on the bond.
Marigold Inc. issues $4,100,000 of 7% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 10%. Click here to view factor tables. What amount will Marigold receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to O decimal places, e.g. 458,581.) Amount received by Marigold when bonds were issued $ 10822
Mary Smith Company issued $396,000 of 10%, 20-year bonds on January 1, 2025, at 102. Interest is payable semiannually on July 1 and January 1. Mary Smith Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Click here to view factor tables. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) a. b. C. The issuance of the bonds. The payment of interest and related amortization on July 1, 2025. The accrual of interest and the related amortization on December 31, 2025. Date 1/1/25 + Account Titles and Explanation Debit Credit 11₁
Concord Inc. issues $ 2,300,000 of 7% bonds due in 12 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 10%. What amount will Concord receive when it issues the bonds? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and final answer to 0 decimal places, e.g. 458,581.)
On June 30, 2024, Single Computers issued 5% stated rate bonds with a face amount of $280 million. The bonds mature on June 30, 2039 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2024. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Determine the price of the bonds on June 30, 2024. 2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.
Coronado Company sells 8% bonds having a maturity value of $2,180,000 for $2,014,720. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. (a) Determine the effective-interest rate. (Round answer to O decimal places, e.g. 18%.) The effective-interest rate %

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