Point North Inc. issued bonds on September 1, 2020, with a par value of $180,000. The...
Point North Inc. issued bonds on September 1, 2020, with a par value of $180,000. The bonds mature in 15 years and pay 9.50% annual interest in two semiannual payments. On the issue date, the annual market rate of interest for the bonds turned out to be 8%
a)What is the semiannual interest payment for these bonds? (
b)How many semiannual interest payments will be made on these bonds over their life?
c)Calculate the issue price of the bonds on September 1, 2020
d)Present the journal entry that would be made to record the bonds’ issuance
Homework Answers
| a. | Par(maturity value) | Semiannual | Semi annual cash | |||
| rate | interest payment | |||||
| 180,000 | 4.75% | = | 8550 | |||
| b. | Number of payments = 15*2 = 30 | |||||
4)
| Table values are based on | |||||
| n= | 30 | ||||
| i = | 4% | ||||
| Cash flow | Table value | Amount | Present value | ||
| Par (maturity) value | 180000 | * | 0.3083 | = | 55494 |
| Interest (annuity) | 8550 | * | 17.2920 | = | 147847 |
| Price of bonds | 203341 | ||||
Journal entry :
| Date | account and explanation | debit | credit |
| Cash | 203341 | ||
| Premium on bonds payable | 23341 | ||
| Bonds payable | 180,000 | ||
| (To record bond issue) |
Add Answer to:
Point North Inc. issued bonds on September 1, 2020, with a par
value of $180,000. The...
Bonds
Question-1 Calculating the present value of a bond and recording the issuance LO4,5 Mindsetta Music Inc. issued bonds on March 1, 2017, with a par value of $300,000. The bonds mature in 15 years and pay 8% annual interest in two semiannual payments. On the issue date, the annual market rate of interest for the bonds turned out to be 10%. Required: a. What is the size of the semiannual interest payment for these bonds? b....
Bringham Company issues bonds with a par value of $800,000 on their stated issue date.
Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made on these bonds over their life? 3. Use the interest rates given to determine whether the bonds are issued...
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The...
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The bonds mature in 10 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The...
Bringham Company issues bonds with a par value of $660,000 on
their stated issue date. The bonds mature in 10 years and pay 9%
annual interest in semiannual payments. On the issue date, the
annual market rate for the bonds is 12%. (Table B.1, Table B.2,
Table B.3, and Table B.4) (Use appropriate factor(s) from the
tables provided.)
1. What is the amount of each semiannual interest payment for
these bonds?
2. How many semiannual interest payments will be made...
Bringham Company issues bonds with a par value of $630,000 on their stated issue date. The...
Bringham Company issues bonds with a par value of $630,000 on their stated issue date. The bonds mature in 7 years and pay 8% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 10%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Citywide Company issues bonds with a par value of $80,000 on their stated issue date. The...
Citywide Company issues bonds with a par value of $80,000 on their stated issue date. The bonds mature in six years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Citywide Company issues bonds with a par value of $75,000 on their stated issue date. The...
Citywide Company issues bonds with a par value of $75,000 on their stated issue date. The bonds mature in five years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Citywide Company issues bonds with a par value of $66,000 on their stated issue date. The...
Citywide Company issues bonds with a par value of $66,000 on
their stated issue date. The bonds mature in ten years and pay 12%
annual interest in semiannual payments. On the issue date, the
annual market rate for the bonds is 10%. (Table B.1, Table B.2,
Table B.3, and Table B.4) (Use appropriate factor(s) from
the tables provided.)
1. What is the amount of each semiannual interest
payment for these bonds?
2. How many semiannual interest payments will be
made...
Exercise 10-3A Computing bond interest and price; recording bond issuance LO C2 Bringham Company issues bonds...
Exercise 10-3A Computing bond interest and price; recording bond issuance LO C2 Bringham Company issues bonds with a par value of $530,000 on their stated issue date. The bonds mature in 5 years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12% (Table B.1. Table B. 2. Table 8.3. and Table 8.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest...
Exercise 10-8A Computing bond interest and price; recording bond issuance LO C2, P3 Citywide Company issues...
Exercise 10-8A Computing bond interest and price; recording bond issuance LO C2, P3 Citywide Company issues bonds with a par value of $65,000 on their stated issue date. The bonds mature in nine years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest...
Bringham Company issues bonds with a par value of $660,000 on their stated issue date. The bonds mature in 10 years and pay 9% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Bringham Company issues bonds with a par value of $660,000 on
their stated issue date. The bonds mature in 10 years and pay 9%
annual interest in semiannual payments. On the issue date, the
annual market rate for the bonds is 12%. (Table B.1, Table B.2,
Table B.3, and Table B.4) (Use appropriate factor(s) from the
tables provided.)
1. What is the amount of each semiannual interest payment for
these bonds?
2. How many semiannual interest payments will be made...
Citywide Company issues bonds with a par value of $75,000 on their stated issue date. The bonds mature in five years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest payment for these bonds? 2. How many semiannual interest payments will be made...
Citywide Company issues bonds with a par value of $66,000 on
their stated issue date. The bonds mature in ten years and pay 12%
annual interest in semiannual payments. On the issue date, the
annual market rate for the bonds is 10%. (Table B.1, Table B.2,
Table B.3, and Table B.4) (Use appropriate factor(s) from
the tables provided.)
1. What is the amount of each semiannual interest
payment for these bonds?
2. How many semiannual interest payments will be
made...
Exercise 10-3A Computing bond interest and price; recording bond issuance LO C2 Bringham Company issues bonds with a par value of $530,000 on their stated issue date. The bonds mature in 5 years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 12% (Table B.1. Table B. 2. Table 8.3. and Table 8.4) (Use appropriate factor(s) from the tables provided.) 1. What is the amount of each semiannual interest...
Most questions answered within 3 hours.
-
A. Suppose your manager indicates that for a normally
distributed data set you are analyzing, your...
asked 19 minutes ago -
During the month of August, the average temperature of a lake
next to a local college...
asked 47 seconds ago -
Which of these four researchers is most likely to have made Type
1 error
Kim who...
asked 14 minutes ago -
In a performance test, each of two cars takes 8.9 s to
accelerate from rest to...
asked 15 minutes ago -
Sapphire Aerospace operates 52 weeks per year, and its cost of
goods sold last year was...
asked 18 minutes ago -
Create ER Model
Assets are resources that are used in CMS to display content.
Each asset...
asked 13 minutes ago -
For each the following molecules draw the best possible
structure based on formal charges for each...
asked 19 minutes ago -
A proton moves in the plane of this paper toward the top of the
page. A...
asked 28 minutes ago -
different divisions differing lines of business use
different costs of capital because their cost of equity...
asked 25 minutes ago -
Give an algorithm to determine whether or not the elements
of
an array of integers are...
asked 32 minutes ago -
. Gravimetric analysis. The gravimetric analysis that we will
perform in lab occurs according to the...
asked 51 minutes ago -
Learning curve problem:
A company was ordered to make 6 custom made parts. the labor
costs...
asked 48 minutes ago