On October 1, 2020, Ross Wind Energy Inc. issued a $1,650,000, 9.0%, seven-year bond. Interest is to be paid annually each October 1. Assume a November 30 year-end.
a. Calculate the issue price of the bond assuming a market interest rate of 8% on the date of the bond issue.
On October 1, 2020, Ross Wind Energy Inc. issued a $1,650,000, 9.0%, seven-year bond. Interest is...
On October 1, 2020, Ross Wind Energy Inc. issued a $1,650,000, 9.0%, seven-year bond. Interest is to be paid annually each October 1. Assume a November 30 year-end. a. Calculate the issue price of the bond assuming a market interest rate of 8% on the date of the bond issue.
Help Save On March 1, 2020, Quinto Mining Inc. issued a $540,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020. Required: Part 1 a. Calculate the bond issue price assuming a market interest rate of 7% on the date of issue. (Do not round intermediate calculations. Round the final answer to nearest whole dollar.) Total issue price nces b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediate calculations. Round the final answers...
On November 1, 2018, Natalia Corporation issued $200,000 8% four year bonds, where interest is payable semi-annually on April 30 and October 31. The bonds were dated November 1, 2018 and mature on November 1, 2022. The accounting period ends on December 31. The market rate on date of issue was 10%. 1. Calculate the proceeds of the bond (price) on November 1, 2018. 2. Prepare a full amortization schedule using the effective-interest method of amortization, starting your schedule at...
B Inc. purchased a $20,000 bond on its issue date, October 1, Year 1. The bond pays interest at maturity, September 30, Year 4, at a rate of 4% compounded annually. B Inc. has a December 31 year end. What amount of interest must be included in income for Year 1?
Metlock Inc. issued $730,000 of 10.40%, 19-year bonds on January 1, 2020, at 103. Interest is payable semi-annually on July 1 and January 1. Metlock Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.) A. Prepare the journal entry to record the issuance of the bonds. B. Prepare the journal entry to...
Metlock Inc. issued $730,000 of 10.40%, 19-year bonds on January 1, 2020, at 103. Interest is payable semi-annually on July 1 and January 1. Metlock Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 10.00%. (With a market rate of 10.00%, the issue price would be slightly higher. For simplicity, ignore this.) A. Prepare the journal entry to record the issuance of the bonds. B. Prepare the journal entry to...
On June 1, 2020, JetCom Inventors Inc. issued a $610,000 6%, three-year bond. Interest is to be paid semiannually beginning December 1, 2020 Required: a. Calculate the issue price of the bond assuming a market interest rate of 7%. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Issue price of the bond b. Using the effective interest method, prepare an amortization schedule. (Do not round Intermediate calculations. Round the final answers to the nearest...
On June 1, 2020, JetCom Inventors Inc. issued a $610,000 6%, three-year bond. Interest is to be paid semiannually beginning December 1, 2020 Required: a. Calculate the issue price of the bond assuming a market interest rate of 7% (Do not round Intermediate calculations. Round the final answer to the nearest whole dollar.) Issue price of the bond $ 593,747 b. Using the effective interest method, prepare an amortization schedule. (Do not round intermediate calculations. Round the final answers to...
Stilton Hotels Ltd. issued 10-year bonds on November 1, 2020, to finance the purchase of several new hotels. The bonds pay interest semi-annually on April 30 and October 31 every year. Stilton Hotels decided to retire some of the bonds on June 1, 2022. Stilton Hotels follows IFRS Other information pertaining to the issuance of the bonds follows: Face value of bonds $ 1,152,000 Coupon rate Effective interest rate 10% Percentage of bond issue that was retired 19% Price at...
On January 1, 2020, Pharoah Corporation purchased a newly issued
$1,525,000 bond. The bond matured on December 31, 2022, and paid
interest at 6% every June 30 and December 31. The market interest
rate was 8%. Pharoah’s fiscal year-end is October 31, and the
company had the intention and ability to hold the bond until its
maturity date. The bond will be accounted using the amortized cost
model.
1. Calculate the price paid for the bond using a financial
calculator...