The repurchase price of bonds of Company GA.

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Answer 1

Question

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

2.

To determine

To record: The journal entry of maturity of loan.

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

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John was a civil servant with the Trinidad & Tobago (T&T) Government for over 30 years and retired 5 years ago. He is in receipt of a monthly pension. John also received a lump sum on retirement and invested part of this in a small retail business in downtown San Fernando. He retails designer clothing and perfumes and manages to make a modest profit, after deduction of business expenses. John invested the remainder of his pension lump sum in the Unit Trust Corporation of Trinidad and Tobago and is in receipt of monthly dividends. John receives a monthly pension of $6,000. The retail business has a financial year- end of 31 December and in the fiscal year 2011 he made a taxable profit of $100,000. In the fiscal year 2011 in T&T there is a personal allowance of $60,000 and the rate of Income tax is 25%. John no longer qualifies for any of the other deductions available to individuals and receives his pension after deduction of tax under the P.A.Y.E. system. In 2011, John…

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Calculate the total revenue

Answer 2

Question

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

2.

To determine

To record: The journal entry of maturity of loan.

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

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Answer 3

Question

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

2.

To determine

To record: The journal entry of maturity of loan.

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

2.

To determine

To record: The journal entry of maturity of loan.

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

2.

To determine

To record: The journal entry of maturity of loan.

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

Answer 6

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

Answer 7

Chapter 9, Problem 9.5APE

1.

To determine

To compute: The repurchase price of bonds of Company GA.

Answer 8

2.

To determine

To record: The journal entry of maturity of loan.

Answer 9

2.

To determine

To record: The journal entry of maturity of loan.

Answer 10

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

Answer 11

3.

To determine

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

Answer 12

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

Answer 13

4.

To determine

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 9 - What is capital structure? How do the capital...Ch. 9 - Prob. 2RQ Ch. 9 - What are bond issue costs? What is an underwriter?Ch. 9 - Why do some companies issue bonds rather than...Ch. 9 - Prob. 5RQ Ch. 9 - What are convertible bonds? How do they benefit...Ch. 9 - How do we calculate the issue price of bonds? Is...Ch. 9 - Prob. 8RQ Ch. 9 - If bonds issue at a discount, is the stated...Ch. 9 - Prob. 10RQ

The repurchase price of bonds of Company GA.

To compute: The repurchase price of bonds of Company GA.

To record: The journal entry of maturity of loan.

To explain: Whether it is ethical to time the repurchase of bonds in 2015 in order to include a $2 million gain on repurchase in a bad year and the results, if the transaction is fully disclosed.

To explain: Whether the early retirement of 5% bonds and the reissue of 9% bonds, a good idea from the business standpoint.

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Chapter 9 Solutions