On July 1 2021, espresso industries issued $700000 of 12 % bonds, dated July 1. Interest...

On July 1 2021, espresso industries issued $700000 of 12 % bonds, dated July 1. Interest is payable semiannually on June 30 and December 31. The bonds mature in three years. the market yield for bonds of similar risk and maturity is 14% . the proceeds to the bond issuer was 666633. bond issue cost was $40000. What is the effective interest rate of this bond? 12%, 14% 16.6%, 7%

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jeff jeffy answered 2 years ago

On January 1, 2018, Masterwear Industries issued $700,000 of 12% bonds, dated January 1. Interest of...

On January 1, 2018, Masterwear Industries issued $700,000 of 12% bonds, dated January 1. Interest of $42,000 is payable semiannually on June 30 and December 31. The bonds mature in three years. The market yield for bonds of similar risk and maturity is 10%. The entire bond issue was purchased by United Intergroup, Inc. The company incurred the issue cost of $14,000. Show all journal entries.

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On March 1, 2021, Baddour, Inc., issued 12% bonds, dated January 1, with a face amount of $175 million. The bonds were priced at $153.6 million (plus accrued interest) to yield 14%. Interest is paid semiannually on June 30 and December 31. Baddour’s fiscal year ends September 30. Required: 1. to 3. What would be the amount(s) related to the bonds Baddour would report in its balance sheet, income statement and statement of cash flows for the year ended September...

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Young Co. issues $600,000 of 12% bonds dated January 1, 2021. Interest is payable semiannually on...

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On January 1, 2021, Mania Enterprises issued 10% bonds dated January 1, 2021, with a face amount of $19.4 million. The bonds mature in 2030 (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. Round your intermediate calculations to...

On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face...

On February 1, 2021, Wolf Inc. issued 10% bonds dated February 1, 2021, with a face amount of $220,000. The bonds sold for $263,544 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Wolf's fiscal year is the calendar year. Wolf uses the effective interest method of amortization. Required: 1. Prepare the journal entry to record the bond issuance on February 1, 2021. 2. Prepare...

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On January 1, 2021, Bishop Company issued 10% bonds dated January 1, 2021, with a face amount of $19.7 million. The bonds mature in 2030 (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. Round your intermediate calculations to...

On January 1, 2021, Cool Universe issued 10% bonds dated January 1, 2021, with a face...

On January 1, 2021, Cool Universe issued 10% bonds dated January 1, 2021, with a face amount of $20 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. The company's fiscal year is the calendar year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from...

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