Homework Answers
Determination of present value of Note Recievable at jan 1, 2018:
Given:
Face value & Maturity value of note = $2440000
Life of note (due on), (n) = 10 years
Interest rate = 14%
Market interest rate (i) = 16%
That implies,
Annual interest amount = Face value × interest rate = $2440000×14% = $341600
And,
The present value of the note is equal to the sum of present value of maturity value of note which is due after 10 years and present value annuity of annual interest payments for 10 years using the market interest rate of 16% as discount rate.
First,
Present value of maturity value of note
= Maturity value × present value factor at 16%, 10 periods
= $2240000 × 0.2267
= $9881536
Then now,
Present value annuity of interest payments
= Interest amount × present value ordinary annuity factor at 16%, 10 periods
= $341600 × 4.8332
= $1651021
Therefore,
Present value of note recievable
= Present value of maturity value of note + present value annuity of annual interest payments
= $9881536 + $1651021
= $11532557
______×_______
Let me know if you have any queries, All the best,
Kindly UPVOTE,
HAPPY CHEGGING.
Add Answer to:
On January 1, 2018. Bandar Company accepted a 14 note, dated January 1, 2018, with a...
On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face...
On January 1, 2018, Bishop Company issued 10% bonds dated January 1, 2018, with a face amount of $19.3 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to the...
On March 1, 2018, Bowan Corporation issued 6% bonds dated January 1, 2018 with a par...
On March 1, 2018, Bowan Corporation issued 6% bonds dated January 1, 2018 with a par value of $800,000. The bonds were sold for the present value of the bonds on March 1, 2018 plus two-month accrued interest. The bonds mature on December 31, 2023. Interest is paid semiannually on Jun 30 and December 31. Bowan's fiscal year ends on December 31 each year. The effective interest rate is 8%. Required: a. Determine the present value the bonds on March...
1) On January 1, 2018, Boomer Universal issued 12% bonds dated January 1, 2018, with a...
1) On January 1, 2018, Boomer Universal issued 12% bonds dated January 1, 2018, with a face amount of $200 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record the bond issuance by Boomer on January 1, 2018. 3. ...
On January 1, 2018, Blshop Company Issued 8 % bonds dated January 1, 2018, with a...
On January 1, 2018, Blshop Company Issued 8 % bonds dated January 1, 2018, with a face amount of $20.7 million. The bonds mature In 2027 (10 years). For bonds of similar risk and maturity, the market yleld Is 10 %. Interest Is pald semlannually 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 appropriete factor(s) from the tables provided. Round your intermedilate...
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $94 million on January 1, 2018. The bonds...
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $94 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. 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 appropriate factor(s) from the tables provided.) Required: 1. Determine...
On January 1, 2019, Bishop Company issued 8% bonds dated January 1, 2019, with a face...
On January 1, 2019, Bishop Company issued 8% bonds dated January 1, 2019, with a face amount of $20 million. The bonds mature in 2028 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Determine the price of the bonds at January 1, 2019. Show computations Prepare the journal entry to record the bond issuance by Bishop on January 1, 2019. Prepare the journal entry...
On January 1, 2018, Mania Enterprises issued 10% bonds dated January 1, 2018, with a face amount of $19.1 million. The...
On January 1, 2018, Mania Enterprises issued 10% bonds dated January 1, 2018, with a face amount of $19.1 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 8%. 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 appropriate factor(s) from the tables provided. Enter your answers in whole...
On January 1, 2018, bonds with a face value of $120,000 were sold. The bonds mature on January 1,...
On January 1, 2018, bonds with a face value of $120,000 were sold. The bonds mature on January 1, 2028. The face interest rate is 6%. The bonds pay interest semiannually on July 1 and January 1 . The market rate of interest is 8%. What is the market price of the bonds on January 1 2018? The present value of $1 for 20 periods at 4 is 0.456. The present value of an ordinary annuity of $1 for 20...
On January 1, a company issues bonds dated January 1 with a par value of $390,000....
On January 1, a company issues bonds dated January 1 with a par value of $390,000. The bonds mature in 3 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31, The market rate is 10%. Using the present value factors below, the issue (selling) price of the bonds is: Present Value Present n-i- of an Annuity value of $1 2.5313 5.1579 2.4869 5.0757 3 6 9.0% 4.5% 10.0% 5.0% 0.7722 0.7679 0.7513...
10. On January 1, 2018, Sunland Company sold property to Blossom Company. There was no established...
10. On January 1, 2018, Sunland Company sold property to Blossom Company. There was no established exchange price for the property, and Blossom gave Sunland a S4700000 zero-interest- bearing note payable in 5 equal annual installments of $940000, with the first payment due December 31, 2018. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 990 was $3656318 at January 1, 2018. What should be the balance of the...
On January 1, 2018, Blshop Company Issued 8 % bonds dated January 1, 2018, with a face amount of $20.7 million. The bonds mature In 2027 (10 years). For bonds of similar risk and maturity, the market yleld Is 10 %. Interest Is pald semlannually 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 appropriete factor(s) from the tables provided. Round your intermedilate...
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $94 million on January 1, 2018. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. 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 appropriate factor(s) from the tables provided.) Required: 1. Determine...
On January 1, 2018, Mania Enterprises issued 10% bonds dated January 1, 2018, with a face amount of $19.1 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 8%. 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 appropriate factor(s) from the tables provided. Enter your answers in whole...
On January 1, 2018, bonds with a face value of $120,000 were sold. The bonds mature on January 1, 2028. The face interest rate is 6%. The bonds pay interest semiannually on July 1 and January 1 . The market rate of interest is 8%. What is the market price of the bonds on January 1 2018? The present value of $1 for 20 periods at 4 is 0.456. The present value of an ordinary annuity of $1 for 20...
On January 1, a company issues bonds dated January 1 with a par value of $390,000. The bonds mature in 3 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31, The market rate is 10%. Using the present value factors below, the issue (selling) price of the bonds is: Present Value Present n-i- of an Annuity value of $1 2.5313 5.1579 2.4869 5.0757 3 6 9.0% 4.5% 10.0% 5.0% 0.7722 0.7679 0.7513...
10. On January 1, 2018, Sunland Company sold property to Blossom Company. There was no established exchange price for the property, and Blossom gave Sunland a S4700000 zero-interest- bearing note payable in 5 equal annual installments of $940000, with the first payment due December 31, 2018. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 990 was $3656318 at January 1, 2018. What should be the balance of the...
Most questions answered within 3 hours.
-
At a certain temperature, the equilibrium constant, Kc, for this
reaction is 53.3.
H2(g)+I2(g)−⇀↽−2HI(g)Kc=53.3
At this...
asked 16 minutes ago -
Question1 ) The STL provides similiar classes called stack and
queue, both of which gave functions...
asked 1 hour ago -
For Questions 1-4, assume you have 5 bits available:
1. For (positive) integers: What is the...
asked 1 hour ago -
convert grams into vloume with the density of water being at
.997514 g/cm^3 at 23.1 Celsuis...
asked 3 hours ago -
Foreman company obtained a $20,000, 6% loan on May 1, 2018.
Principal and interest will be...
asked 3 hours ago -
5. Problem 11.05 (Discounted Payback)
eBook
Project L costs $60,000, its expected cash inflows are $14,000
per...
asked 3 hours ago -
1. Which of the following is true about politics and health
organizations?
A. Health organizations are...
asked 4 hours ago -
A space vehicle is coasting at a constant velocity of 18.1 m/s
in the +y direction...
asked 5 hours ago -
5) Use the following balanced equation to answer questions
(a)-(i).
3 Cu(s) + 8 HNO3(aq) →...
asked 5 hours ago -
A three-year maturity bond with a 12% annual coupon rate is
currently traded at par $1000...
asked 5 hours ago -
1.
What is the minimum volume to use in the Spec 20 cuvette in order
to...
asked 5 hours ago -
A builder wants to install wall-to-wall carpeting in a living
room of length 8.87 m and...
asked 5 hours ago