Homework Answers
Interest is paid on face value of bond
Hence, total Interest Expense = 100,000*5%*20
= $100,000
i.e. B
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When $100,000 of 5% annual interest, 20-year bonds are issued at 98%, what will be the...
QUESTION 13 A coupon bond has an ask price of 106%. If the last semi-annual coupon payment was made one month ago...
QUESTION 13 A coupon bond has an ask price of 106%. If the last semi-annual coupon payment was made one month ago and the coupon rate is 9%, what is the full price of the bond? a. $1,067.50. b. $1,075.00 O c. $1,090.00 d. $1,105.00. QUESTION 14 When $100,000 of 5% annual interest, 20-year bonds are issued at 98%, what will be the total interest expense for the bond issue? a. $50,000 b. $98,000 C. $100,000 d. $102,000.
Norcal issued five-year 7% bonds with a face value of $100,000, for $96,567.94 on January 1, Year 1 when the market effe...
Norcal issued five-year 7% bonds with a face value of $100,000, for $96,567.94 on January 1, Year 1 when the market effective rate of interest was 7.5%. The bonds pay annual interest each December 31. Stanton uses the effective interest method for amortization of premium or discount on bonds payable. Required: a) What is the annual amount of cash that Stanton will pay to bondholders for interest? b) What amount of interest expense and discount amortization should Stanton recognize for...
11. Eaton Company issued $5 million of bonds with a 10% coupon rate of interest. When...
11. Eaton Company issued $5 million of bonds with a 10% coupon rate of interest. When Eaton issued the bonds, the market rate of interest was 11 %. Wwhich of the following statements is correct? a) The bonds were issued at a premium. b) Annual interest expense will exceed the company's actual cash payments for interest c) Annual interest expense will be $500,000. d) The book value of the bond will decrease as the bond matures.
On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for...
On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for $103,604.78 minus bond issue costs of $3,000. The bonds carry a stated rate of interest of 13% payable annually on December 31 and were issued to yield 12%. The company uses the effective interest method of amortization. Required: Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, bond issue cost amortizations, and the repayment of the...
Mellilo Corporation issued $6,000,000 of 20-year, 9.5 percent bonds on July 1, 2013, at 98. Interest...
Mellilo Corporation issued $6,000,000 of 20-year, 9.5 percent bonds on July 1, 2013, at 98. Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30, 2033. Mellilo's financial year ends on December 31. Prepare the following journal entries: a. Prepare the journal entry at July 1, 2013, to record the issuance of the bonds. (Omit the "$" sign in your response.) Date General Journal...
Need answers Mellilo Corporation issued $5 million of 20-year, 9.5 percent bonds on July 1,2011, at...
Need answers
Mellilo Corporation issued $5 million of 20-year, 9.5 percent bonds on July 1,2011, at 98. Interest 30, 2031. Mellilo's fiscal year ends on December 31. Prepare the following journal entries: a. July 1, 2011, to record the issuance of the bonds b. December 31, 2011, to pay interest and amortize the bond discount. c. June 30, 2031, to pay interest, amortize the bond discount, and retire the bonds at maturity s is due on June 30 and December...
There are 3 bonds in this portfolio A 20 year semi-annual bond where: Par is $100,000...
There are 3 bonds in this portfolio A 20 year semi-annual bond where: Par is $100,000 C = 4% r = 6% A 30 year annual bond where: Par is $50,000 C = 3% r = 3.5% a 5 year semi-annual bond where: Par is $30,000 C = 3% r = 2.25% Find the value of each bond in the portfolio & how much is the portfolio worth?
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a...
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a a. premium of $2,000. discount of $2,000, C. gain of $2,000. d. loss of $2,000
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a...
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a a. premium of $2,000. discount of $2,000, C. gain of $2,000. d. loss of $2,000
On January 1, 2012, Scott Corporation issued 10-year $100,000 bonds with a 6% stated rate of...
On January 1, 2012, Scott Corporation issued 10-year $100,000 bonds with a 6% stated rate of interest at 103. Scott Corporation pays the interest annually on December 31 and uses the straight-line amortization method. Which of the following is the correct general journal entry to record the interest expense for 2012? Debit Credit a. Interest Expense 6,000 Premium on Bonds Payable 300 Cash 5,700 b. Interest Expense 6,000 Cash 6,000 c. Interest Expense 6.300 Premium on Bonds Payable 300 Cash...
QUESTION 13 A coupon bond has an ask price of 106%. If the last semi-annual coupon payment was made one month ago and the coupon rate is 9%, what is the full price of the bond? a. $1,067.50. b. $1,075.00 O c. $1,090.00 d. $1,105.00. QUESTION 14 When $100,000 of 5% annual interest, 20-year bonds are issued at 98%, what will be the total interest expense for the bond issue? a. $50,000 b. $98,000 C. $100,000 d. $102,000.
11. Eaton Company issued $5 million of bonds with a 10% coupon rate of interest. When Eaton issued the bonds, the market rate of interest was 11 %. Wwhich of the following statements is correct? a) The bonds were issued at a premium. b) Annual interest expense will exceed the company's actual cash payments for interest c) Annual interest expense will be $500,000. d) The book value of the bond will decrease as the bond matures.
Need answers
Mellilo Corporation issued $5 million of 20-year, 9.5 percent bonds on July 1,2011, at 98. Interest 30, 2031. Mellilo's fiscal year ends on December 31. Prepare the following journal entries: a. July 1, 2011, to record the issuance of the bonds b. December 31, 2011, to pay interest and amortize the bond discount. c. June 30, 2031, to pay interest, amortize the bond discount, and retire the bonds at maturity s is due on June 30 and December...
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a a. premium of $2,000. discount of $2,000, C. gain of $2,000. d. loss of $2,000
If $100,000 (face value) in bonds are issued at 98, then the bonds were issued a a. premium of $2,000. discount of $2,000, C. gain of $2,000. d. loss of $2,000
On January 1, 2012, Scott Corporation issued 10-year $100,000 bonds with a 6% stated rate of interest at 103. Scott Corporation pays the interest annually on December 31 and uses the straight-line amortization method. Which of the following is the correct general journal entry to record the interest expense for 2012? Debit Credit a. Interest Expense 6,000 Premium on Bonds Payable 300 Cash 5,700 b. Interest Expense 6,000 Cash 6,000 c. Interest Expense 6.300 Premium on Bonds Payable 300 Cash...
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