Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Chapter B, Problem 2E
To determine
Concept Introduction:
Present Value:
The value of a sum of money in present, in contrast to some future value if it is invested at a compound interest for a certain period of time
How much cash the company can borrow for $20,000 after 3 years at a 10% interest rate per annum compounded annually
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Blockbuster Co is building a new state of the art cineplex at a cost of $3,500,000.They received a capital investment of $1,500,000. The remainder of funds will haveto be borrowed so they decided to issue bonds. They have issued 10.5%, 5-yearbonds. These bonds were issued on January 1st, 2020, and pay semi-annual intereston July 1st and January 1st. The bonds yield 10%. The year end is December 31st
Calculate the proceeds from the sale of the bond. Clearly show theamount of the premium or discount and state two reasons which supportthe premium or discount calculated
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Fundamental Accounting Principles
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