Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.)
a. Pear, Inc. issued $214,000 of 10-year, 8 percent bonds at 103.
b. Apple, Inc. issued 599,000 of five-year, 12 percent bonds at 97
c. Cherry Co. issued $181,000 of five-year, 6 percent bonds at 101 1/4
d. Grape, Inc. issued $70,000 of four-year, 8 percent bonds at 98.
Homework Answers
| a. | Issued at 103 | |||
| Cash proceeds=214000*103%=$ 220420 | ||||
| Cash proceeds (220420) > Face value ($ 214000) | ||||
| Hence, bond issued at premium | ||||
| Premium=Cash proceeds-Face value=220420-214000=$ 6420 | ||||
| b. | Issued at 97 | |||
| Cash proceeds=99000*97%=$ 96030 | ||||
| Cash proceeds (96030) < Face value ($ 99000) | ||||
| Hence, bond issued at discount | ||||
| Discount=Face value-Cash proceeds=99000-96030=$ 2970 | ||||
| c. | Issued at 101 1/4 | |||
| Cash proceeds=181000*101.25%=$ 183262.5 | ||||
| Cash proceeds (183262.5) > Face value ($181000) | ||||
| Hence, bond issued at premium | ||||
| Premium=Cash proceeds-Face value=183262.5-181000=$ 2262.5 | ||||
| d. | Issued at 98 | |||
| Cash proceeds=70000*98%=$ 68600 | ||||
| Cash proceeds (68600) < Face value ($ 70000) | ||||
| Hence, bond issued at discount | ||||
| Discount=Face value-Cash proceeds=70000-68600=$ 1400 | ||||
| Cash proceeds | Discount or premium | |||
| a. | 220420 | Premium | ||
| b. | 96030 | Discount | ||
| c. | 183262.5 | Premium | ||
| d. | 68600 | Discount | ||
Add Answer to:
Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount
Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate...
Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Proceeds Discount or Premium a. Pear, Inc. issued $169,000 of 10-year, 8 percent bonds at 102. Apple, Inc. issued $75,000 of five-year, 12 percent bonds at 99. Cherry Co. issued $180,000 of five-year, 6 percent bonds at 101 1/4. d. Grape, Inc. issued $43,000 of four-year, 8...
For each of the following situations, calculate the amount of bond discount or premium, if any. (Do not round your inter...
For each of the following situations, calculate the amount of bond discount or premium, if any. (Do not round your intermediate calculations.) a. Gray Co. issued $58,000 of 6 percent bonds at 101 1/2 $_______ Discount or Premium? b. Bush, Inc. issued $81,000 of 10-year, 6 percent bonds at 95 1/2 $_______ Discount or Premium? c. Oak, Inc. issued $184,000 of 20-year, 6 percent bonds at 102 $_______ Discount or premium? d. Willow Co. issued $160,000 of 15-year, 7 percent...
ework Saved Help Soy Exercise 7-18 Determining the amount of bond premiums and discounts LO 7-8,...
ework Saved Help Soy Exercise 7-18 Determining the amount of bond premiums and discounts LO 7-8, 7-9 Required For each of the following situations, calculate the amount of bond discount or premium, if any. (Do not round intermedia calculations.) a. Gray Co, issued $63,000 of 6 percent bonds at 103 1/2 Bush, Inc. issued $91,000 of 10-year, 6 percent bonds at 95 1/2. Oak, Inc. issued $198,000 of 20-year, 6 percent bonds at 103. d. Willow Co. issued $163,000 of...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd Co. issued $60,000,000 of five-year, 10% bonds at a market (effective) interest rate of 12%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 5 and Exhibit 7. Round to the nearest dollar. $ b....
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd Co. issued $30,000,000 of five-year, 12% bonds at a market (effective) interest rate of 14%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 5 and Exhibit 7. Round to the nearest dollar. b. The...
Exercise 9-48 (Algorithmic) Bond Premium and Discount Markway Inc. is contemplating selling bonds. The issue is...
Exercise 9-48 (Algorithmic)
Bond Premium and Discount
Markway Inc. is contemplating selling bonds. The issue is to be
composed of 750 bonds, each with a face amount of $800.
1. Calculate how much Markway is able to borrow
if each bond is sold at a premium of $30.
$
2. Calculate how much Markway is able to borrow
if each bond is sold at a discount of $10.
$
3. Calculate how much Markway is able to borrow
if each...
please solve this for me, thanks PR 14-5A Bond discount, entries for bonds payable transactions, interest...
please solve this for me, thanks
PR 14-5A Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount On July 1, 2016, Merideth Industries Inc. issued $28,500,000 of 10-year, 8% bonds at a market (effective) interest rate of 9%, receiving cash of $26,646,292. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Joumalize the entry to record the amount of cash...
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells...
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co, issued $30,000,000 of five-year, 13% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit B and Exhibit 10. Round to the nearest dollar. b. The...
Please help me with the question no: 5. Thanks in advance Bond Discount, Entries for Bonds...
Please help me with the question no: 5. Thanks in advance Bond Discount, Entries for Bonds Payable Transactions On July 1, Year 1, Danzer Industries Inc. issued $4,700,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $4,114,278. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from...
Required (1) Assume the bonds are issued at 103 on June 1 to yield an effective...
Required (1) Assume the bonds are issued at 103 on June 1 to yield an effective inter- est rate of 10.1 percent. Prepare entries in journal form for June 1, 20x7, November 30, 20x7, and May 31, 20x8. (Round amounts to the nearest dollar.) 2. Assume the bonds are issued at 97 on June 1 to yield an effective interest rate of 10.9 percent. Prepare entries in journal form for June 1, 20x7. November 30, 20x7, and May 31, 20x8....
Required Compute the cash proceeds from bond issues under the following terms. For each case, indicate whether the bonds sold at a premium or discount. (Round your answers to nearest dollar amount.) Cash Proceeds Discount or Premium a. Pear, Inc. issued $169,000 of 10-year, 8 percent bonds at 102. Apple, Inc. issued $75,000 of five-year, 12 percent bonds at 99. Cherry Co. issued $180,000 of five-year, 6 percent bonds at 101 1/4. d. Grape, Inc. issued $43,000 of four-year, 8...
ework Saved Help Soy Exercise 7-18 Determining the amount of bond premiums and discounts LO 7-8, 7-9 Required For each of the following situations, calculate the amount of bond discount or premium, if any. (Do not round intermedia calculations.) a. Gray Co, issued $63,000 of 6 percent bonds at 103 1/2 Bush, Inc. issued $91,000 of 10-year, 6 percent bonds at 95 1/2. Oak, Inc. issued $198,000 of 20-year, 6 percent bonds at 103. d. Willow Co. issued $163,000 of...
Compute Bond Proceeds, Amortizing Discount by Interest Method, and Interest Expense Boyd Co. produces and sells aviation equipment. On the first day of its fiscal year, Boyd Co. issued $30,000,000 of five-year, 12% bonds at a market (effective) interest rate of 14%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit 5 and Exhibit 7. Round to the nearest dollar. b. The...
please solve this for me, thanks
PR 14-5A Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount On July 1, 2016, Merideth Industries Inc. issued $28,500,000 of 10-year, 8% bonds at a market (effective) interest rate of 9%, receiving cash of $26,646,292. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Instructions 1. Joumalize the entry to record the amount of cash...
Compute Bond Proceeds, Amortizing Premium by Interest Method, and Interest Expense Ware Co. produces and sells motorcycle parts. On the first day of its fiscal year, Ware Co, issued $30,000,000 of five-year, 13% bonds at a market (effective) interest rate of 11%, with interest payable semiannually. Compute the following: a. The amount of cash proceeds from the sale of the bonds. Use the tables of present values in Exhibit B and Exhibit 10. Round to the nearest dollar. b. The...
Required (1) Assume the bonds are issued at 103 on June 1 to yield an effective inter- est rate of 10.1 percent. Prepare entries in journal form for June 1, 20x7, November 30, 20x7, and May 31, 20x8. (Round amounts to the nearest dollar.) 2. Assume the bonds are issued at 97 on June 1 to yield an effective interest rate of 10.9 percent. Prepare entries in journal form for June 1, 20x7. November 30, 20x7, and May 31, 20x8....
Most questions answered within 3 hours.
-
Cranium, Inc., purchases term papers from an overseas supplier
under a continuous review system. The average...
asked 1 hour ago -
1- What is the freezing point of pure water (in degrees
Celsius)?
2-
he molar mass...
asked 2 hours ago -
Determine the direction of the force that will act on the charge
in each of the...
asked 2 hours ago -
You purchase your daily coffee at the Chemist’s Coffeehouse and
have a choice of two cups:...
asked 4 hours ago -
Which of the following pairs of chemicals could be used to make
a buffer solution?
A.)...
asked 4 hours ago -
Problem 16-51 Sales
Activity Variance (LO 16-3)Odessa, Inc., reports the following
information concerning operations for the...
asked 5 hours ago -
Pictured on the right are thee point charges Q1 = 18.4 μC, Q2 =
-30.6 μC,...
asked 5 hours ago -
A graduate student is conducting research in psychology and
needs to obtain the IQ scores of...
asked 5 hours ago -
R2.84: There are 2 defective products in a production lot of 10.
An inspector randomly selected...
asked 7 hours ago -
Consider the following equilibrium system: COCl2(g) CO(g) +
Cl2(g) A 10.00 L evacuated flask is filled...
asked 7 hours ago -
1) What are the two distinct steps that one needs to perform
when developing a data...
asked 7 hours ago -
2) Write a C++ program that uses a class called “Degree” to
obtain the trigonometric
values...
asked 8 hours ago