The following information is used to answer questions 13 to 16: Bonds: $1,000,000 Par Value Semiannual...
Garcia Company issues 9.50%, 15-year bonds with a par value of
$410,000 and semiannual interest payments. On the issue date, the
annual market rate for these bonds is 13.50%, which implies a
selling price of 79 1/2. The effective interest method is used to
allocate interest expense.
1. Using the implied selling price of 79 1/2,
what are the issuer's cash proceeds from issuance of these
bonds.
2. What total amount of bond interest expense
will be recognized over the...
Garcia Company issues 10.50% , 15- year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 14.50 % , which implies a selling price of 75 1/2. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 75 1/2, what are the issuer's cash proceeds from issuance of these bonds. Cash proceeds 2. What total amount of bond interest...
Garcia Company issues 10.50%, 15-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 14.50%, which implies a selling price of 75 1/2. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 75 1/2, what are the issuer's cash proceeds from issuance of these bonds. Cash proceeds 2. What total amount of bond Interest expense will be recognized...
Garcia Company issues 10%, 15-year bonds with a par value of $230,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8%, which implies a selling price of 117 14, The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 117 14, what are the issuer's cash proceeds from issuance of these bonds. Cash proceeds 2. What total amount of bond interest expense will be recognized...
Stanford Issues bonds dated January 1, 2017, with a par value of $240,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $222,307. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond Interest expense will be recogned over the...
Sharmer Company issues 5%, 5-year bonds with a par value of $1,000,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%. What is the bond's issue (selling) price, assuming the following factors: n= i= 5 5% Present Value of an Annuity 4.3295 8.7521 4.2124 8.5302 Present value of $1 0.7835 0.7812 0.7473 0.7441 5 10 6% 6% 3% O $1,213,255 $786,745 $1,250,000 O $957,355 0 $1,000,000
Garcia Company issues 12.50%, 15-year bonds with a par value of $470,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 16.50%, which implies a selling price of 81. The effective interest method is used to allocate interest expense. 1. Using the implied selling price of 81, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life of...
Evin is considering buying a bond with a $1,000 par value that has 16 semi-annual coupon payments remaining until the bond matures. The semi-annual interest payments are $15.00 and the annual discount rate is 6 percent. Assume that there are 180 days in the coupon period and that there are 120 days between the settlement date and the next coupon payment date. What price will Evin pay for the bond? A. The bid price plus $10 B. The bid price...
Stanford issues bonds dated January 1, 2017, with a par value of $251,000. The bonds’ annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $238,667 . 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over...
Enviro Company issues 8%, 10-year bonds with a par value of $260,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 12. The straight-line method is used to allocate interest expense. 1. Using the implied selling price of 87 %, what are the issuer's cash proceeds from issuance of these bonds? 2. What total amount of bond interest expense will be recognized over the life...