Bonds Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond. Straight-line amortization bond Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate. To Identify: The face amount of the bonds.

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Answer 1

Question

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

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Answer 2

Question

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

(2)

To determine

To Identify: The selling price of the bonds.

(3)

To determine

To Identify: The term to maturity in years.

(4)

To determine

Which approach method is used in the Amortization schedule?

(5)

To determine

To Identify: The stated annual interest rate.

(6)

To determine

To Identify: The effective annual interest rate.

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 6

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

Answer 7

Chapter 14, Problem 14.4P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

Straight-line amortization bond

Straight line method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the same amount of interest expense in each period of interest payment.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Identify: The face amount of the bonds.

Answer 8

(2)

To determine

To Identify: The selling price of the bonds.

Answer 9

(2)

To determine

To Identify: The selling price of the bonds.

Answer 10

(3)

To determine

To Identify: The term to maturity in years.

Answer 11

(3)

To determine

To Identify: The term to maturity in years.

Answer 12

(4)

To determine

Which approach method is used in the Amortization schedule?

Answer 13

(4)

To determine

Which approach method is used in the Amortization schedule?

Answer 14

(5)

To determine

To Identify: The stated annual interest rate.

Answer 15

(5)

To determine

To Identify: The stated annual interest rate.

Answer 16

(6)

To determine

To Identify: The effective annual interest rate.

Answer 17

(6)

To determine

To Identify: The effective annual interest rate.

Answer 18

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

Answer 19

(7)

To determine

To Identify: The Cash interest paid over the term to maturity period.

Answer 20

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 21

(8)

To determine

To Identify: The total effective interest expense recorded over the term to maturity.

Answer 22

Expert Solution & Answer

Answer 23

Expert Solution & Answer

Answer 24

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Answer 25

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - Prob. 14.5Q Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

To Identify: The selling price of the bonds.

To Identify: The term to maturity in years.

Which approach method is used in the Amortization schedule?

To Identify: The stated annual interest rate.

To Identify: The effective annual interest rate.

To Identify: The Cash interest paid over the term to maturity period.

To Identify: The total effective interest expense recorded over the term to maturity.

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Chapter 14 Solutions