What are the two obligations incurred by a corporation when issuing bonds and why do bonds sell at a discount or premium? Please explain in paragraph or two
What are the two obligations incurred by a corporation when issuing bonds and why do bonds...
What are the two obligations incurred by a corporation when issuing bond? And why do bonds sell at a discount or premium?
3. A company is planning to borrow funds by selling (issuing) bonds. The coupon rate on the bonds is 3%. The current market rate for similar bonds (risk, maturity, etc) is 5%. Will this bond sell at a premium, a discount, or at par? Why?
Question 2 Bonds may be redeemed (retired) before maturity by the issuing corporation. Explain why a company would decide to retire bonds before maturity and the necessary steps to record the redemption.
Question 2 Bonds may be redeemed (retired) before maturity by the issuing corporation. Explain why a company would decide to retire bonds before maturity and the necessary steps to record the redemption.
10. What is call risk? When are bonds likely to be called and why? 11. What is the difference between premium bonds and discount bonds? Include something about their coupons. 12. What is the difference between senior bonds and subordinate debentures? 13. What do bond rating measure?
Explain why some bonds sell for a premium while others sell for discount?
he Latham Corporation is planning on issuing bonds that pay no interest but can be converted into $1000 at maturity, 8 years from their purchase. To price these bonds competitively with other bonds of equal risk, it is determined that they should yield 7 percent, compounded annually. At what price should the Latham Corporation sell these bonds? The price of the Latham Corporation bonds should be?
Entries for Issuing Bonds and Amortizing Premium by Straight-Line Method Daan Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Daan Corporation issued $4,600,000 of 5-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $4,781,993. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 2016. For a compound transaction, if an amount box does not require an entry, leave...
EX 11-4 Entries for issuing bonds and amortizing premium by straight-line method Obi. 2 Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1. Smiley issued $20,000,000 of five-year, 9% bonds at a market (effective) interest rate of 8%, receive ing cash of $20,811,010. Interest is payable semiannually on April 1 and October 1. Journalize the entries to record the following: a. Issuance of bonds on April 1, 20Y1. b. First interest payment on October 1, 20Y1, and...
On December 31, 2018, Squidward Corporation issued $500,000, 8%, 20-year bonds for $414,210 cash when the market rate of interest was 10%. The bonds pay interest semi-annually each June 30 and December 31. Squidward uses the effective interest method of amortization to amortize and premium or discount. What is the face value of the bond? exact number, no tolerance On December 31, 2018, Squidward Corporation issued $500,000, 8%, 20-year bonds for $414,210 cash when the market rate of interest was...