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QUESTION: On January 1, 2020, Tiffany & Company issues 3-year bonds payable with a face value...
On January 1, 2020, Tiffany and Company issues 3 year bonds payable with a face value...
On January 1, 2020, Tiffany and Company issues 3 year bonds
payable with a face value $100,000, stated interest 10% payable at
12/31 each year. Market interest rate is 8%. What should be the
issuance price at 1/1/2020?
Please help with explanation and steps.
6% 1.06000 1.12360 1.19102 1.26248 1.33823 Table 1: Future Value of 1 8% 9% 1.08000 1.09000 1.16640 1.18810 1.25971 1.29503 1.36049 1.41158 1.46933 1.53862 10% 1.10000 1.21000 1.33100 1.46410 1.61051 12% 1.12000 1.25440 1.40493 1.57352 1.76234...
On January 1, 2020, Bulgur Corporation issues 12-year bonds with a face value of $10,000,000 and...
On January 1, 2020, Bulgur Corporation issues 12-year bonds with a face value of $10,000,000 and a stated annual interest rate of 6%. The bonds pay interest annually on December 31. The market rate of interest is 5%, and the company receives cash proceeds of $10,886,325 when the bonds are issued. What is the journal entry that Bulgur will make to record the second bond interest payment on December 31, 2021?
On January 1, 2020, the company has purchased a 14 year $100,000 bonds investment. The bond...
On January 1, 2020, the company has purchased a 14 year $100,000
bonds investment. The bond calls for an annual payment of interest
on 12/31 at a contractual (stated) rate of 6%. Given the credit
standing of the issuing company, an interest rate of 8.25% has been
imputed as the effective rate. The principal amount of the bond is
due at maturity. The company classified this bond investment as
Held-to-Maturity.
1. At what amount should the investment be recorded on...
On January 1, Year 1, McGee Corporation issues 5%, 10-year bonds with a face amount of $100,000. Interest is paid semian...
On January 1, Year 1, McGee Corporation issues 5%, 10-year bonds with a face amount of $100,000. Interest is paid semiannually on June 30 and December 31. On issuance date, the market rate of interest is 5%; therefore, the issue price of the bonds is $100,000. The journal entry for the issuance of the bonds will include a:
On January 1, 2018, Professors Credit Union (PCU) issued 7%, 20-year bonds payable with face value...
On January 1, 2018, Professors Credit Union (PCU) issued 7%, 20-year bonds payable with face value of $100,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 5% will be priced at 7. They are in...
Requirement 1. Determine the present value of five-year bonds payable with face value of $91,000 and...
Requirement 1. Determine the present value of five-year bonds payable with face value of $91,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest wholo dallar) Present Value i Requirements When market rate of interest is 12% annually Enter any number in the edit fields and then click Check Answer. 1. Determine the present value of five-year bonds payable with face value of...
On January 1, 2018, Nurses Credit Union (NCU) issued 8%, 20-year bonds payable with face value...
On January 1, 2018, Nurses Credit Union (NCU) issued 8%, 20-year bonds payable with face value of $600,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 7% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 8% bonds issued when the market interest rate is 7% will be priced at V. They are in...
On January 1, 2018, White, Inc. issues $1,000,000 total face value, 10-yr bonds with an annual...
On January 1, 2018, White, Inc. issues $1,000,000 total face value, 10-yr bonds with an annual stated interest rate of 5%. Interest is paid semi-annually on June 30th and December 31st. The company received $559,260 upon issuance. (Solutions posted online) Period Cash Paid Interest Expense Amortization of Discount/Premium Unamortized Premium/Discount Bonds Carrying Value (Book Value) Issuance Don’t use Don’t use Don’t use 6/30/2018 12/31/2018 6/30/2019 Are the bonds issued at a premium, a discount, or at face value? What is...
On January 1, 2018, Loop Raceway issued 620 bonds, each with a face value of $1,000,...
On January 1, 2018, Loop Raceway issued 620 bonds, each with a face value of $1,000, a stated interest rate of 7 percent paid annually on December 31, and a maturity date of December 31, 2020. On the issue date, the market interest rate was 8 percent, so the total proceeds from the bond issue were $604,002. Loop uses the straight-line bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare...
4. Bonds Edna Company issues a 5 year, 5% face rate $100,000 bond on January 1,...
4. Bonds Edna Company issues a 5 year, 5% face rate $100,000 bond on January 1, 2016, with interest payable each December 31. The bond is sold to yield 5.2% annual and the issue costs are $200. a. Calculate the price at which the bond sold on the market. pate = 5.2% N= 5 ri PV = 9,136.87 PMT: 5000 S V 6 . Calculate the bond's effective interest rate (including issue costs. c. Prepare an amortization table covering 2016...
On January 1, 2020, Tiffany and Company issues 3 year bonds
payable with a face value $100,000, stated interest 10% payable at
12/31 each year. Market interest rate is 8%. What should be the
issuance price at 1/1/2020?
Please help with explanation and steps.
6% 1.06000 1.12360 1.19102 1.26248 1.33823 Table 1: Future Value of 1 8% 9% 1.08000 1.09000 1.16640 1.18810 1.25971 1.29503 1.36049 1.41158 1.46933 1.53862 10% 1.10000 1.21000 1.33100 1.46410 1.61051 12% 1.12000 1.25440 1.40493 1.57352 1.76234...
On January 1, 2020, the company has purchased a 14 year $100,000
bonds investment. The bond calls for an annual payment of interest
on 12/31 at a contractual (stated) rate of 6%. Given the credit
standing of the issuing company, an interest rate of 8.25% has been
imputed as the effective rate. The principal amount of the bond is
due at maturity. The company classified this bond investment as
Held-to-Maturity.
1. At what amount should the investment be recorded on...
On January 1, 2018, Professors Credit Union (PCU) issued 7%, 20-year bonds payable with face value of $100,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 5% when PCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 7% bonds issued when the market interest rate is 5% will be priced at 7. They are in...
Requirement 1. Determine the present value of five-year bonds payable with face value of $91,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. (Round intermediary calculations and final answer to the nearest wholo dallar) Present Value i Requirements When market rate of interest is 12% annually Enter any number in the edit fields and then click Check Answer. 1. Determine the present value of five-year bonds payable with face value of...
On January 1, 2018, Nurses Credit Union (NCU) issued 8%, 20-year bonds payable with face value of $600,000. The bonds pay interest on June 30 and December 31. Read the requirements. Requirement 1. If the market interest rate is 7% when NCU issues its bonds, will the bonds be priced at face value, at a premium, or at a discount? Explain. The 8% bonds issued when the market interest rate is 7% will be priced at V. They are in...
4. Bonds Edna Company issues a 5 year, 5% face rate $100,000 bond on January 1, 2016, with interest payable each December 31. The bond is sold to yield 5.2% annual and the issue costs are $200. a. Calculate the price at which the bond sold on the market. pate = 5.2% N= 5 ri PV = 9,136.87 PMT: 5000 S V 6 . Calculate the bond's effective interest rate (including issue costs. c. Prepare an amortization table covering 2016...
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