December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate...

December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate for $191,575. The bond pays semiannual interest on June 30^th and December 31^st. The fair values of the bonds at the end of 2016~2018 are $194,500, $194,200, and $195,750. Martin sold its investment in Marlin’s bond on July 1, 2019 at 98 ½ (i.e. selling price is = 98.5% of the face value). Please answer all following questions using Excel Template.

What is the market interest rate for Marlin’s bond?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 2 hours ago

Next > < Previous

Related Solutions

On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest...

On December 31, 2015, Martin Corp invested in Marlin’s 5-year, $200,000 bond with a 5% interest rate for $191,575. The bond pays semiannual interest on June 30th and December 31st. The fair values of the bonds at the end of 2016~2018 are $194,500, $194,200, and $195,750. Martin sold its investment in Marlin’s bond on July 1, 2019 at 98 ½ (i.e. selling price is = 98.5% of the face value). Please answer all following questions using Excel Template. C. Assuming...

On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on...

On December 31, 2015, Jenna Corp issued $1,000,000, 8%, 5-year bonds. Interest is payable semi-annually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. Required a. Using the present value tables, estimate the issue price of the bonds under the following three assumptions: i. Market Rate is 8% ii. Market Rate is 6% iii. Market Rate is 10% b. Prepare the journal entries for each of the assumptions

On December 31, 2019, Repsol Corp issued $1,400,000, 9%, 5-year bonds. Interest is payable semiannually on...

On December 31, 2019, Repsol Corp issued $1,400,000, 9%, 5-year bonds. Interest is payable semiannually on June 30 and December 31. The corporation uses the effective interest method of amortizing bond premium or discount. Using a financial calculator or excel, estimate the issue price of the bonds under the following three assumptions: (1) Market Rate is 9% (2) Market Rate is 8%

On December 31, 2018, when the market interest rate is 8%, Arnold Corporation issues $200,000 of 6%, 10-year bonds payable

On December 31, 2018, when the market interest rate is 8%, Arnold Corporation issues $200,000 of 6%, 10-year bonds payable. The bonds pay interest semiannually. Determine the present value of the bonds at issuance.

Problem # 3 (Notes Receivable with Unrealistic Interest Rate) On December 31, 2015, Tran Co. performed...

Problem # 3 (Notes Receivable with Unrealistic Interest Rate) On December 31, 2015, Tran Co. performed environmental consulting services for Hayden Co. Hayden was short of cash, and Tran Co. agreed to accept a $100,000 zero-interest-bearing note due December 31, 2017, as payment in full. Hayden is somewhat of a credit risk and typically borrows funds at a rate of 15%. Tran is much more creditworthy and has various lines of credit at 8%. Instructions Prepare the journal entry to...

3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5%...

3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5% and monthly payments. If she wants to pay off the loan after 8 years, what would be the outstanding balance on the loan? (A) $84,886 (B) $91,246 (C) $171,706 (D) $175,545

Kyle invested $15,000 in a savings account. If the interest rate is 5% per year, how...

Kyle invested $15,000 in a savings account. If the interest rate is 5% per year, how much will be in the account in 10 years for monthly compounding? Round your answer to the nearest cent. Do NOT round until you calculate the final answer Provide your answer below:

A $2,000,000 bond was issued on September 15 2015 with a 5 year maturity. Coupon rate...

A $2,000,000 bond was issued on September 15 2015 with a 5 year maturity. Coupon rate is 5.5% and the present YTM is 5.75% p.a. compounded half-yearly. Interest is paid semi annually. How much is the bond worth on 15 March 2018?

Jordan Company’s annual accounting year ends on December 31. It is now December 31, 2015, and...

Jordan Company’s annual accounting year ends on December 31. It is now December 31, 2015, and all of the 2015 entries have been made except for the following: a. The company owes interest of $600 on a bank loan. The interest will be paid when the loan is repaid on September 30, 2016. No interest has been recorded. b. On September 1, 2015, Jordan collected six months’ rent of $4,200 on storage space. At that date, Jordan debited Cash and...

BA Corp is issuing a 10-year bond with a coupon rate of 6.04 percent. The interest...

BA Corp is issuing a 10-year bond with a coupon rate of 6.04 percent. The interest rate for similar bonds is currently 5.57 percent. Assuming annual payments, what is the value of the bond?

Subjects