Exercise 14-7 (Algo) Determine the price of bonds; issuance; straight-line method [LO14-2]
Universal Foods issued 10% bonds, dated January 1, with a face
amount of $110 million on January 1, 2021. The bonds mature on
December 31, 2040 (20 years). The market rate of interest for
similar issues was 12%. Interest is paid semiannually on June 30
and December 31. Universal uses the straight-line method. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Required:
1. Determine the price of the bonds at January 1,
2021.
2. to 4. Prepare the journal entries to record
their issuance by Universal Foods on January 1, 2021, interest on
June 30, 2021 and interest on December 31, 2028.
Homework Answers
Answer to Requirement 1:
Face Value of Bonds = $110,000,000
Annual Coupon Rate = 10.00%
Semiannual Coupon Rate = 5.00%
Semiannual Coupon = 5.00% * $110,000,000
Semiannual Coupon = $5,500,000
Time to Maturity = 20 years
Semiannual Period = 40
Annual Interest Rate = 12.00%
Semiannual Interest Rate = 6.00%
Present Value of Interest = $5,500,000 * PVA of $1 (6.00%,
40)
Present Value of Interest = $5,500,000 * 15.0463
Present Value of Interest = $82,754,650
Present Value of Principal = $110,000,000 * PVA of $1 (6.00%,
40)
Present Value of Principal = $110,000,000 * 0.0972
Present Value of Principal = $10,692,000
Answer to Requirement 2 and 4:
Semiannual Amortization of Discount = Discount on Bonds Payable
/ Semiannual Period
Semiannual Amortization of Discount = $16,553,350 / 40
Semiannual Amortization of Discount = $413,834
Add Answer to:
Exercise 14-7 (Algo) Determine the price of bonds; issuance;
straight-line method [LO14-2]
Universal Foods issued 10%...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $100 million on...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $100 million on January 1, 2021. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 10%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE. THANK YOU! Exercise 14-7 (Algo) Determine...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 14-7 (Algo) Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $225 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31 Universal uses the straight-line method. (FV of $1,...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $250 million on...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $250 million on January 1, 2018. The bonds mature on December 31, 2032 (15 years). The market rate of interest for similar issues was 10%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:...
Exercise 14-7 Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds,...
Exercise 14-7 Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $225 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1 2021. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31 Universal uses the straight-line method. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables provided.) Required:...
Exercise 14-9 (Algo) Issuance of bonds; effective interest; amortization schedule; financial statement effects [LO14-2] When Patey...
Exercise 14-9 (Algo) Issuance of bonds; effective interest;
amortization schedule; financial statement effects [LO14-2]
When Patey Pontoons issued 4% bonds on January 1, 2021, with a
face amount of $520,000, the market yield for bonds of similar risk
and maturity was 5%. The bonds mature December 31, 2024 (4 years).
Interest is paid semiannually on June 30 and December 31. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $160 million on...
Universal Foods issued 8% bonds, dated January 1, with a face
amount of $160 million on January 1, 2016. The bonds mature on
December 31, 2030 (15 years). The market rate of interest for
similar issues was 10%. Interest is paid semiannually on June 30
and December 31. Universal uses the straight-line method. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Required:...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE. THANK YOU! Exercise 14-8 (Algo) Investor,...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 14-8 (Algo) Investor, straight-line method [LO14-2] Universal Foods issued 10% bonds, dated January 1, with a face amount of $186 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA...
Please prepare the journal entries and answer everything wrong. Exercise 14-7 (Algo) Determine the price of...
Please prepare the journal
entries and answer everything wrong.
Exercise 14-7 (Algo) Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $200 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1,...
Exercise 10-8 Straight-Line: Recording bond issuance and premium amortization LO P3 Wookie Company issues 10%, five-year...
Exercise 10-8 Straight-Line: Recording bond issuance and premium amortization LO P3 Wookie Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $95,000 and semiannual interest payments. (0) Semiannual Period-End January 1, "issuance June 30, first payment December 31, second payment Unamortized Premium $8,011 7,210 carrying Value $ 103,011 102,210 101,409 (2) Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1...
Universal Foods issued 8% bonds, dated January 1, with a face amount of $100 million on January 1, 2021. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 10%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 14-7 (Algo) Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $225 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31 Universal uses the straight-line method. (FV of $1,...
Exercise 14-7 Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $225 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $150 million on January 1 2021. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31 Universal uses the straight-line method. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables provided.) Required:...
Exercise 14-9 (Algo) Issuance of bonds; effective interest;
amortization schedule; financial statement effects [LO14-2]
When Patey Pontoons issued 4% bonds on January 1, 2021, with a
face amount of $520,000, the market yield for bonds of similar risk
and maturity was 5%. The bonds mature December 31, 2024 (4 years).
Interest is paid semiannually on June 30 and December 31. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use...
Universal Foods issued 8% bonds, dated January 1, with a face
amount of $160 million on January 1, 2016. The bonds mature on
December 31, 2030 (15 years). The market rate of interest for
similar issues was 10%. Interest is paid semiannually on June 30
and December 31. Universal uses the straight-line method. (FV of
$1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Required:...
PLEASE PUT SOLUTION IN THE SAME FORMAT AS THE IMAGE.
THANK YOU!
Exercise 14-8 (Algo) Investor, straight-line method [LO14-2] Universal Foods issued 10% bonds, dated January 1, with a face amount of $186 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA...
Please prepare the journal
entries and answer everything wrong.
Exercise 14-7 (Algo) Determine the price of bonds; issuance; straight-line method [LO14-2] Universal Foods issued 12% bonds, dated January 1, with a face amount of $200 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. (FV of $1, PV of $1,...
Exercise 10-8 Straight-Line: Recording bond issuance and premium amortization LO P3 Wookie Company issues 10%, five-year bonds, on January 1 of this year, with a par value of $95,000 and semiannual interest payments. (0) Semiannual Period-End January 1, "issuance June 30, first payment December 31, second payment Unamortized Premium $8,011 7,210 carrying Value $ 103,011 102,210 101,409 (2) Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1...
Most questions answered within 3 hours.
-
Which of the following is a provision of
NAFTA?
A.
Common accounting rules
B.
Adding new...
asked 18 minutes ago -
Need to do in Python? Can do in Javascript but not in Python
Write a function...
asked 32 minutes ago -
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 2 hours ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 3 hours ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 5 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 6 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 7 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 8 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 7 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 9 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 9 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 9 hours ago