When the bonds mature at the end of Year 4, what amount of principal will Olive pay investors?
How much cash was received on the day the bonds were issued (sold)?
Were the bonds issued at a premium or a discount? If so, what was the amount of the premium or discount?
How much cash will be disbursed for interest each period and in total over the life of the bonds?
What is the coupon rate? (Enter your answer as a percentage rounded to 1 decimal place (i.e. 0.123 should be entered as 12.3).)
What was the annual market rate of interest on the date the bonds were issued? (Enter your answer as a percentage rounded to 1 decimal place (i.e. 0.123 should be entered as 12.3).)
What amount of interest expense will be reported on the income statement for Year 2 and Year 3? (Round your final answers to nearest whole dollar amount.)
What amount will be reported on the balance sheet at the end of Year 2 and Year 3?
Homework Answers
1. When the bonds mature at the end of Year 4, what amount of principal will Olive pay investors?
$60000
2. How much cash was received on the day the bonds were issued (sold)?
$61030
3. How much cash will be disbursed for interest each period and in total over the life of the bonds?
$15530 (3906 + 3891 + 3875 + 3858)
4. What is the coupon rate?
7.0% (4140/ 60000)
5. What was the annual market rate of interest on the date the bonds were issued
6.4% (3906 / 61030)
6. What amount of interest expense will be reported on the income statement for Year 2 and Year 3
Year 2 = $3891
Year 3 = $3875
7. What amount will be reported on the balance sheet at the end of Year 2 and Year 3
Year 2 = 60547
Year 3 = 60282
Add Answer to:
When the bonds mature at the end of Year 4, what amount of principal will Olive pay investors? Ho...
1. complete the amortization schedule. 2. When the bonds mature at the end of Year 4,...
1. complete the amortization schedule.
2. When the bonds mature at the end of Year 4, what amount of
principal will Olive pay investors?
3. How much cash will be disbursed for interest each
period and in total over the life of the bonds?
4. What was the annual market rate of interest on the date the
bonds were issued?
5. What amount of interest expense will be reported on the
income statement for Year 2 and Year 3?
6. What...
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1. complete the amortization schedule.
2. When the bonds mature at the end of Year 4, what amount of
principal will Olive pay investors?
3. How much cash will be disbursed for interest each
period and in total over the life of the bonds?
4. What was the annual market rate of interest on the date the
bonds were issued?
5. What amount of interest expense will be reported on the
income statement for Year 2 and Year 3?
6. What...
On January 1f this ycar, Olive Corporation issucd bands. Interest is payable once a year on December pertains to the bonds 1. The bonds mature st the end of four years. Olive uses the effective interest aTortization method. The partial ly completed amortization schedule below Cesh Amortizalion Dale Interest Balance January 1. Year 42,734 $ 2,393 7 $ 2,562 S 169 42387 End of Year 2 7 Farl of Ya 42.000 363 Required information 10.00 points Required: 1. Complete the...
A company issued 4%, 10-year bonds with a face amount of $78 million. The market yield for bonds of similar risk and maturity is 5%. Interest is paid semiannually. At what price did the bonds sell? (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 doll 1. Enter your answers in whole dollars. Round final answers to the...
On January 1, a company issued 4%, 20-year bonds with a face amount of $75 million for $45,310,905 to yield 8%. Interest is paid semiannually. What was the interest expense at the effective interest rate on the December 31 annual income statement? (Enter your answers in whole dollars. Round your intermediate calculations to the nearest dollar amount.) Period-End Cash Interest Paid Bond Interest Expense Discount Amortization Carrying Value $ 45,310,905 T January 1 June 30 December 31 Total
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When Patey Pontoons issued 8% bonds on January 1, 2021, with a face amount of $540,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2024 (4 years). 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 the price of the bonds...
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