Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are...
Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Determine the effective-interest rate. The effective-interest rate
Homework Answers
| Calculation of discount | ||
| Bond face value or maturity value | 3000000 | |
| Less: | Bond discount/issue value | 2772550 |
| Discount | 227450 |
Bond period January 1, 2020 to January 1, 2025 so,
| No.of year | 5 |
Discount per year=Discount/No. of year
=227450/5
=45490
| Discount per year | 45490 |
| interest@8% | 240000 |
| Total | 285490 |
|
average of discount price and face value=(face value+discounted value)/2 =(3000000+2772550)/2 |
| average of discount price and face value= | 4386275 |
Effective interest rate =285490/4386275*100=6.51%
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Swifty Company sells 8% bonds having a maturity value of
$3,000,000 for $2,772,550. The bonds are...
Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are...
Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. The effective-interest rate?
Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are...
Swifty Company sells 8% bonds having a maturity value of $3,000,000 for $2,772,550. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. The effective-interest rate? i need to find out how to compute the effective interest rate?
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Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
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under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
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Exercise 14-07 Pronghorn Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The...
Exercise 14-07
Pronghorn Company sells 8% bonds having a maturity value of
$2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and
mature January 1, 2025. Interest is payable annually on January
1.
Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
The effective-interest rate
%
Set up a schedule of interest expense and discount amortization
under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
final answer to 0 decimal places,...
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Marin Company sells 8% bonds having a maturity value of $1,430,000 for $1,321,582. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.) The effective-interest rate 10 % Set up a schedule of interest expense and discount amortization under the effective-interest method. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g....
Splish Company sells 8% bonds having a maturity value of
$2,400,000 for $2,218,040. The bonds are dated January 1, 2020, and
mature January 1, 2025. Interest is payable annually on January
1.
Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
The effective-interest rate
%
Set up a schedule of interest expense and discount amortization
under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
final answer to 0 decimal places, e.g. 38,548.)...
Pearl Company sells 8% bonds having a maturity value of $2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and mature January 1, 2025. Interest is payable annually on January 1. ✓ Your answer is correct. Determine the effective-interest rate. (Round answer to 0 decimal places, e.g. 18%.) The effective-interest rate e Textbook and Media Your answer is partially correct. Set up a schedule of interest expense and discount amortization under the effective interest method. (Round intermediate calculations to...
Exercise 14-07
Pronghorn Company sells 8% bonds having a maturity value of
$2,000,000 for $1,848,366. The bonds are dated January 1, 2020, and
mature January 1, 2025. Interest is payable annually on January
1.
Determine the effective-interest rate. (Round
answer to 0 decimal places, e.g. 18%.)
The effective-interest rate
%
Set up a schedule of interest expense and discount amortization
under the effective-interest method. (Round
intermediate calculations to 5 decimal places, e.g. 1.25124 and
final answer to 0 decimal places,...
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