Homework Answers
Option 'A' is correct
Market value of the principal issuance is the sum of Present value of the principal amount to the present value of the interest payments.
Bond market price =
Annual Interest amount * PVAF (r% , n periods) + [principal value * PVIF*(r%, nth period)
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How is the market value of a bond issuance determined? By adding the present value of the principal amount to the p...
Calculate the Present Value in the three scenarios below PART II: BOND ISSUANCE Newly issued 10-year...
Calculate the Present Value in the three scenarios below PART II: BOND ISSUANCE Newly issued 10-year bond Present Value at Issuance Present Value P V Periods N Interest Payments PMT Future Value Semi-annual payment 2017-2027 Interest paid semi-annually This bond make regular semi-annual payments of interest (entered in $ dollars se Future Value in 10 years = Bonds Original Face Value 1. The new value of the bond if overall rates in the market increased by 2% no PV Present...
1. The price of a bond is equal to a. The present value of the face...
1. The price of a bond is equal to a. The present value of the face amount plus the present value of the stated interest payments. b. The future value of the face amount plus the future value of the stated interest payments. c. The present value of the face amount only. d. The present value of the interest only. 2. Which of the following is true for bonds issued at a discount? a. The stated interest rate is greater...
1. The price of a bond is equal to Α . a. The present value of...
1. The price of a bond is equal to Α . a. The present value of the face amount plus the present value of the stated intere payments. b. The future value of the face amount plus the future value of the stated interest payments. c. The present value of the face amount only. d. The present value of the interest only. 2. Which of the following is true for bonds issued at a discount? a. The stated interest rate...
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions
.1. Ten-year bonds payable with face value of $87,000 and stated interest rate of 12%, paid semiannually. The market rate of interest is 12% at issuance. The present value of the bonds at issuance is $87,000 2. Same bonds payable as in assumption 1, but the market interest rate is 16%. The present value of the bonds at issuance is $69,955. 3. Same bonds payable as in assumption 1, but the market interest rate is 10%. The present value of the bonds...
Present Value of $1 PV of Annuity of $1 Issuance of a Bond at Face Value...
Present Value of $1 PV of Annuity of $1 Issuance of a Bond at Face Value On January 1, 2017, Whitefeather Industries issued 1,000, $1,000 face value bonds. The bonds have a(n) 10-year life and pay interest at the rate of 10%. Interest is paid semiannually on July 1 and January 1. The market rate of interest on January 1 was 10%. Use the present value tables that may be found by clicking on the present value table links above....
1) The principal amount of a bond that is repaid at the end of the loan...
1) The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon B) face value. C) maturity D) yield to maturity E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1.000 in the market is called a bond A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays...
1)The principal amount of a bond that is repaid at the end of the loan term...
1)The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon. B) face value. C) maturity. D) yield to maturity. E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1,000 in the market is called a bond. A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays interest...
The face value of a bond is AD 11.000, its stated rate is 7%, and the...
The face value of a bond is AD 11.000, its stated rate is 7%, and the term of the bond is five years. The bond par interest semiannually. At the time of issue, the market rate is 8%. Determine the present value of the bonds at wance (10 points) (3 Pts) (3 Pts) a. Determine the present Value of the bond at issuance. AED b. Determine the present value of the interest payments. AED C. What price should the bond...
Please complete all parts. Thank you Journalize issuance of the bond and the first semiannual interest...
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
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...
Calculate the Present Value in the three scenarios below PART II: BOND ISSUANCE Newly issued 10-year bond Present Value at Issuance Present Value P V Periods N Interest Payments PMT Future Value Semi-annual payment 2017-2027 Interest paid semi-annually This bond make regular semi-annual payments of interest (entered in $ dollars se Future Value in 10 years = Bonds Original Face Value 1. The new value of the bond if overall rates in the market increased by 2% no PV Present...
1. The price of a bond is equal to a. The present value of the face amount plus the present value of the stated interest payments. b. The future value of the face amount plus the future value of the stated interest payments. c. The present value of the face amount only. d. The present value of the interest only. 2. Which of the following is true for bonds issued at a discount? a. The stated interest rate is greater...
1. The price of a bond is equal to Α . a. The present value of the face amount plus the present value of the stated intere payments. b. The future value of the face amount plus the future value of the stated interest payments. c. The present value of the face amount only. d. The present value of the interest only. 2. Which of the following is true for bonds issued at a discount? a. The stated interest rate...
1) The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon B) face value. C) maturity D) yield to maturity E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1.000 in the market is called a bond A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays...
1)The principal amount of a bond that is repaid at the end of the loan term is called the bond's: A) coupon. B) face value. C) maturity. D) yield to maturity. E) coupon rate. 2) A bond with a face value of $1,000 that sells for $1,000 in the market is called a bond. A) par value B) discount C) premium D) zero coupon E) floating rate 3) A bond with a coupon rate of 6 percent that pays interest...
The face value of a bond is AD 11.000, its stated rate is 7%, and the term of the bond is five years. The bond par interest semiannually. At the time of issue, the market rate is 8%. Determine the present value of the bonds at wance (10 points) (3 Pts) (3 Pts) a. Determine the present Value of the bond at issuance. AED b. Determine the present value of the interest payments. AED C. What price should the bond...
Please complete all parts. Thank you
Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective-interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries. Round your final answers to the nearest whole dollar.) Assumption 1. Seven-year bonds payable with face value of $85,000 and stated interest rate of 10%, paid semiannually. The market rate...
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