Homework Answers
Answer- The following bonds will be issued at a discount = Bond 2 & 3.
Explanation- If the bond coupon rate also known as stated rate of interest is lower than the prevailing market interest rates, the bond is issued at discount, in this case bond 2 & 3 having lower stated rate of return compare to the market rate of return.
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Given the information below, which bonds) will be issued at a discount Bond 1 Bond 2...
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return...
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Bond 1 7% 5% Bond 2 8% 8% Bond 3 12% 14% Bond 4 9% 11% Bond 3. Bond 4. Bonds 3 and 4 Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity Interest Expense Increase in value Carrying Value Cash Paid Date 01/01/2021 06/30/2021 12/31/2021...
18. Given the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2...
18. Given the information below, which bond(s) will be issued at a premium? Bond 1 Bond 2 Bond 3 Bond 4 Stated Rate of Return 6% 4% 8% 7% Market Rate of Return 7% 3% 8% 5%
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over t...
1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over the life of the bond. This statement is True or False 2.On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Based on this information, the carrying value of the...
Which of the following describes what happens when bonds are issued when the market interest rate...
Which of the following describes what happens when bonds are issued when the market interest rate is less than the stated interest rate? Multiple Choice The bonds are issued at a premium. The bonds are issued at less than their face value. o It raises the effectiv It raises the effective interest rate above the stated rate of interest. o o The bands are su The bonds are issued at a premium and the effective interest rate is higher than...
Bond Discount, Entries for Bonds Payable Transactions: On July 1, Year 1, Danzer Industries Inc. issued...
Bond Discount, Entries for Bonds Payable Transactions: On July 1, Year 1, Danzer Industries Inc. issued $2,700,000 of 10-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $2,390,299. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. If...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $200,000, a...
On January 1, Year 1, Sheffield Co. issued bonds with a face value of $200,000, a term of ten years, and a stated interest rate of 6%. The bonds were issued at 105, and interest is payable each December 31. Sheffield uses the straight-line method to amortize the bond discount. The carrying value of the bonds that would be reported on the December 31, Year 4 balance sheet is: Multiple Choice A. $204,000. B. $200,000. C. $205,000. D. $206,000.
Required information Problem 10-4A Straight-Line: Amortization of bond discount LO P2 The following information applies to...
Required information Problem 10-4A Straight-Line: Amortization of bond discount LO P2 The following information applies to the questions displayed below.) Legacy issues $560,000 of 9.0%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $507,831 when the market rate is 12% Problem 10-4A Part 2 2. Determine the total bond interest expense to be recognized over the bonds' life Total bond interest expense over life of bonds: Amount repaid...
Tavinona Company issued 1,000; $1,000 bonds for a bond issue of $1,000,000. The bonds were issued...
Tavinona Company issued 1,000; $1,000 bonds for a bond issue of $1,000,000. The bonds were issued for a 10-year term with a coupon rate of 4.5%. The current market rate is 3.5%. Calculate the present (market) value of one bond, then calculate the amount of the bond premium. Multiple Choice $1,473.90; $473.90 $1,049.09; $49.09 $1,090.36; $90.36 $1,083.76; $83.76
On January 1 of Year 1, Congo Express Airways issued $5,200,000 of 7%, bonds that pay...
On January 1 of Year 1, Congo Express Airways issued $5,200,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $4,836,000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized using the straight-line method at a rate of $13,000 every 6 months. The life of these bonds is: Multiple Choice ο ο 14 years ο 11 years ο 37 years ο...
selected financial data for surfer co. is provided below Selected financial data for Surfer Co. is...
selected financial data for surfer co. is provided below
Selected financial data for Surfer Co. is provided below: ($ in millions) Sales Interest expense Tax expense Net income Total assets (beginning of year) Total assets (end of year) Total liabilities (end of year) Total stockholders' equity (end of year) $940,000 3,000 21,000 54,000 900,000 820,000 600,000 220,000 What is the debt to equity ratio for Surfer Co.? Multiple Choice oo ) 0.37. o Given the information below, which bond(s) will...
Given the information below, which bond(s) will be issued at a discount? Stated Rate of Return Market Rate of Return Bond 1 7% 5% Bond 2 8% 8% Bond 3 12% 14% Bond 4 9% 11% Bond 3. Bond 4. Bonds 3 and 4 Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity Interest Expense Increase in value Carrying Value Cash Paid Date 01/01/2021 06/30/2021 12/31/2021...
Which of the following describes what happens when bonds are issued when the market interest rate is less than the stated interest rate? Multiple Choice The bonds are issued at a premium. The bonds are issued at less than their face value. o It raises the effectiv It raises the effective interest rate above the stated rate of interest. o o The bands are su The bonds are issued at a premium and the effective interest rate is higher than...
Required information Problem 10-4A Straight-Line: Amortization of bond discount LO P2 The following information applies to the questions displayed below.) Legacy issues $560,000 of 9.0%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $507,831 when the market rate is 12% Problem 10-4A Part 2 2. Determine the total bond interest expense to be recognized over the bonds' life Total bond interest expense over life of bonds: Amount repaid...
On January 1 of Year 1, Congo Express Airways issued $5,200,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $4,836,000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized using the straight-line method at a rate of $13,000 every 6 months. The life of these bonds is: Multiple Choice ο ο 14 years ο 11 years ο 37 years ο...
selected financial data for surfer co. is provided below
Selected financial data for Surfer Co. is provided below: ($ in millions) Sales Interest expense Tax expense Net income Total assets (beginning of year) Total assets (end of year) Total liabilities (end of year) Total stockholders' equity (end of year) $940,000 3,000 21,000 54,000 900,000 820,000 600,000 220,000 What is the debt to equity ratio for Surfer Co.? Multiple Choice oo ) 0.37. o Given the information below, which bond(s) will...
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