Donald purchased a bond which carries a coupon rate of 10%. The bond is a 5...
Homework Answers
price of bond = present value of annual payments + present value of principal
= (500000*PVFA 12%, 3 years) + (5000000*PVF 12%,3 years)
= (500000*2.40183)+ (5000000*0.71178) = $4759815
carrying amount of investment on Dec. 31 2019 = price of bond + interest expense - interest payment = 4759815+(4759815*11.5%)-(5000000*10%) = $4807194
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Donald purchased a bond which carries a coupon rate of 10%. The bond is a 5...
Samuel company purchased a bond which carries a coupon rate of 10%. The bond is a...
Samuel company purchased a bond which carries a coupon rate of 10%. The bond is a 5 million 3 year bond. The bond was purchased in Jan 1 2019 to yield 12%. The interest is payable annually and the principal is to be repaid on maturity date. The market interest rate on Dec 31 2019 is 11.5%. On dec 21 2020 12.5%. On dec 21 2021 9% assuming the bond is accounted at fair value through profit or loss Compute...
Samuel company purchased a bond which carries a coupon rate of 10%. The bond is a...
Samuel company purchased a bond which carries a coupon rate of 10%. The bond is a 5 million 3 year bond. The bond was purchased in Jan 1 2019 to yield 12%. The interest is payable annually and the principal is to be repaid on maturity date. The market interest rate on Dec 31 2019 is 11.5%. On dec 21 2020 12.5%. On dec 21 2021 9% assuming the bond is accounted at fair value through profit or loss Compute...
D. Prepare the Journal entry for the issuance of the bond, subsequent payments of interest and...
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On January 1, 2020, Pharoah Corporation purchased a newly issued $1,525,000 bond. The bond matured on...
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On January 1, 2020, Pharoah Corporation purchased a newly issued
$1,525,000 bond. The bond matured on December 31, 2022, and paid
interest at 6% every June 30 and December 31. The market interest
rate was 8%. Pharoah’s fiscal year-end is October 31, and the
company had the intention and ability to hold the bond until its
maturity date. The bond will be accounted using the amortized cost
model.
1. Calculate the price paid for the bond using a financial
calculator...
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