The issue price of the debt. Given information: Given, Number of years is 5 years. Rate of interest is 6%. Periodic payments are 0 as zero coupon bonds. Future value is $100,000.

Question

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Answer 1

Question

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

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A company currently has $54 million in sales, $23 million in current assets, $43 million in fixed assets, and $15 million in accounts payable. The fixed assets are currently operated with full capacity and will change proportionally with the sales growth. Sales are projected to be $85 million, current assets are projected to be $32.2 million, and accounts payable are projected to be $21.0 million. What are fixed assets projected to be, given this information?

Answer 2

Question

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

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Answer 3

Question

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

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Answer 4

Question

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

Answer 6

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

Answer 7

Chapter 14, Problem 14.7E

a.

To determine

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

Answer 8

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

Answer 9

b.

To determine

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

Answer 10

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

Answer 11

c.

To determine

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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The issue price of the debt. Given information: Given, Number of years is 5 years. Rate of interest is 6%. Periodic payments are 0 as zero coupon bonds. Future value is $100,000.

Solution Summary: The author calculates the issue price of the debt, assuming the company uses the effective interest method of amortization.

The issue price of the debt.

Given information:

Given,

Number of years is 5 years.

Rate of interest is 6%.

Periodic payments are 0 as zero coupon bonds.

Future value is $100,000.

To prepare: The amortization table for the bond issue assuming that company uses the effective interest method of amortization.

To prepare: The journal entries to record the bond issue, the first interest entry and payment of bonds at maturity.

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Chapter 14 Solutions