Problem DHomework Answers
| a | PV of Interest annuity | $60,000*PVAF(5%,10 years) =$60,000*7.72173 =$463,304 | ||
| (Interest on Bond =$1,000,000*12%*6/12 =$60,000) | ||||
| b | PV of principal | $1,000,000*PVIF(5%,10 years) =$1,000,000*0.61391 =$613,910 | ||
| c | Issue Price($463,304 + $613,910) | $1,077,214 | ||
| d | Premium on Bond issued =$1,077,214 - $1,000,000 =$77,124 | |||
| Accounts and explanation | Debit(in $) | Credit(in $) | ||
| Cash | 10,77,214 | |||
| Bonds Payable | 10,00,000 | |||
| Premium on Bonds Payable | 77,214 | |||
| (To Bond issued at premium) | ||||
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Problem D
PROBLEM D: On January 1, 2020 Lance Co. issued five-year bonds with a face...
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Ex. 2-Calculate market price of a bond. On January 1, 2014 Lance Co. issued five-vear bonds with a face value of $700.0...
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On January 1, 2020, Saints issued $4,825,000, 6% 5-year bonds dated January 1, 2019. The bonds...
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A PROBLEM D: On January 1, 2020 Lance Co. issued five-year bonds with a face value of $1,000,000 and a stated interest rate of 12% payable semiannually on July 1 and January 1. The bonds were sold to yield 10%. Present value table factors are: Present value of 1 for 5 periods at 10% 62092 Present value of 1 for 5 periods at 12% 56743 Present value of 1 for 10 periods at 5% . 61391 Present value of 1...
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