Homework Answers
Fair Value of the bond as on January 1, 2018 is $75,000 which increases to $80,000 but here, the bonds are intended to kept till maturity. Hence, no unrealized gain or shall be recorded.
Therefore,
Unrealized gain (loss) reported in net income = $ 0
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Fower Inc purchased $75,000 of bonds on January 1·2018. The bonds pay interest semiannually and mature...
Fowler Inc. purchased $75,000 of bonds on January 1, 2018. The bonds pay interest semiannually and...
Fowler Inc. purchased $75,000 of bonds on January 1, 2018. The bonds pay interest semiannually and mature in 20 years, at which time the $75,000 principal will be paid. The bonds do not pay any amounts other than interest and principal. Fowler's intention is to collect contractual cash flows and eventually sell the bonds within the next couple of years if the price is right. During 2018, the fair value of the bonds increased to $80,000. Fowler reports investments under...
OPTIONS On January 1, 2018, the Cook's Restaurant decides to invest in Lake Myrth bonds. The...
OPTIONS
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1) New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 20...
1) New Markets has $1,000 face value bonds outstanding that pay interest semiannually, mature in 20 years, and have a 5.8 percent coupon. The current price is quoted at 103.25. What is the yield to maturity? 2) American Hat has $1,000 face value bonds outstanding with a market price of $1,150. The bonds pay interest semiannually, mature in 8 years, and have a yield to maturity of 5.98 percent. What is the current yield? Please explain with simple formula
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Barnes Company purchased $80,000 of 11.0% bonds at par. The bonds mature in six years and are classified as a held-to-maturity security. Which of the following is the correct journal entry to record the receipt of the usual semiannual interest payment? Multiple Choice debit Cash, $4,400; credit Long-Term Investments—HTM, $4,400. debit Cash, $8,800, credit Unrealized Gain-Equity, $8,800. debit Unrealized Gain-Equity, $4,400; credit Cash, $4,400. o debit Cash, $8,800; credit Long-Term Investments-HTM, $8,800. debit Cash, $4,400; credit Interest Revenue, $4,400.
Lunar, Inc., plans to issue $1,000,000 of 8% bonds that will pay interest semiannually and mature...
Lunar, Inc., plans to issue $1,000,000 of 8% bonds that will pay interest semiannually and mature in 5 years. Assume that the effective interest rate is 10% per year compounded semiannually. Compute the selling price of the bonds. Round answer to the nearest whole number.
Rahman Insurance purchased $50,000 of 8% DMH bonds on January 1, 2018 at a price of...
Rahman Insurance purchased $50,000 of 8% DMH bonds on January 1, 2018 at a price of 86 when the market rate of interest was 12%. Rahman intends to hold the bonds until their maturity date of January 1, 2023. The bonds pay interest semiannually on each January 1 and July 1. Record the initial purchase of the bonds by Rahman on January 1, 2018 and the receipt of the interest on the first interest payment date of July 1, 2018....
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and...
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Currently, the yield to maturity for these bonds is 7.22%. What is the market price per bond? $986.81 Please show work
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D' Souza, Inc., issues $900,000 of 11% bonds that pay interest semiannually and mature in seven years. Assume that the market interest (yield) rate is 12% per year compounded semiannually. Compute the bond issuance price.
ABC Corp. issued $8,000,000 of 8% debentures on January 1, 2018. The bonds pay interest semiannually...
ABC Corp. issued $8,000,000 of 8% debentures on January 1, 2018. The bonds pay interest semiannually on July 1 and January 1. The maturity date on these bonds is January 1, 2026. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective interest rate of 10%. Required: Compute the present value of the bonds and the amortization table. During the test, I will provide additional instructions.
Broadbent Insurance purchased $100,000 of 7% DPT bonds on January 1, 2018, at a price of...
Broadbent Insurance purchased $100,000 of 7% DPT bonds on January 1, 2018, at a price of 71 when the market rate of interest was 12%. Broadbent intends to hold the bonds until their maturity date of January 1, 2028. The bonds pay interest semiannually on each January 1 and July 1. Broadbent recorded the following journal entries on January 1, 2018 and July 1, 2018: (Click the icon to view the journal entries.) Read the requirements. First, record the discount...
OPTIONS
On January 1, 2018, the Cook's Restaurant decides to invest in Lake Myrth bonds. The bonds mature on December 31, 2023, and pay interest on June 30 and December 31 at 4% annually. The market rate of interest was 4% on January 1, 2018, so the $110,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2023. Requirements 1. Journalize the transactions related to Cook's investment in Lake Myrth bonds during 2018....
Barnes Company purchased $80,000 of 11.0% bonds at par. The bonds mature in six years and are classified as a held-to-maturity security. Which of the following is the correct journal entry to record the receipt of the usual semiannual interest payment? Multiple Choice debit Cash, $4,400; credit Long-Term Investments—HTM, $4,400. debit Cash, $8,800, credit Unrealized Gain-Equity, $8,800. debit Unrealized Gain-Equity, $4,400; credit Cash, $4,400. o debit Cash, $8,800; credit Long-Term Investments-HTM, $8,800. debit Cash, $4,400; credit Interest Revenue, $4,400.
Broadbent Insurance purchased $100,000 of 7% DPT bonds on January 1, 2018, at a price of 71 when the market rate of interest was 12%. Broadbent intends to hold the bonds until their maturity date of January 1, 2028. The bonds pay interest semiannually on each January 1 and July 1. Broadbent recorded the following journal entries on January 1, 2018 and July 1, 2018: (Click the icon to view the journal entries.) Read the requirements. First, record the discount...
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