Question

In: Accounting

Corp3 issued $750,000 of 5-year bonds with 7% interest payable semiannually at a time when the...

Corp3 issued $750,000 of 5-year bonds with 7% interest payable semiannually at a time when the market rate of interest was 10%. What will be the bonds’ carrying value after the company makes its 7th interest payment? Note—Answer this question without creating an amortization schedule

Solutions

Expert Solution


Related Solutions

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%   
Maggie Enterprises issued $110,000 of 6%, 5-year bonds with interest payable semiannually. Determine the issue price...
Maggie Enterprises issued $110,000 of 6%, 5-year bonds with interest payable semiannually. Determine the issue price if the bonds are priced to yield (a) 6%, (b) 8%, and (c) 4%.
Maggie Enterprises issued $110,000 of 6%, 5-year bonds with interest payable semiannually. Determine the issue price...
Maggie Enterprises issued $110,000 of 6%, 5-year bonds with interest payable semiannually. Determine the issue price if the bonds are priced to yield (a) 6%, (b) 8%, and (c) 4%. Use financial calculator or Excel to calculate answers. Round answers to the nearest whole number.  
On July 1,2021. James issued $1000 of 5% bonds, dated July 1. Interest is payable semiannually...
On July 1,2021. James issued $1000 of 5% bonds, dated July 1. Interest is payable semiannually on June 30 and Dec. 31. The bonds mature in ten years. The market interest rate for bonds of similar risk and maturity is 7%. The entire bond issue was purchased by Tom, Inc. Due to unforeseen circumstances Tom decide to sell its debt investment for $800 on Jan. 1,2023, at which time the bonds have an amortized cost of $850. The amount of...
McGee Company issued $400,000 of 8%, 10-year bonds on January 1, 2017. Interest is payable semiannually...
McGee Company issued $400,000 of 8%, 10-year bonds on January 1, 2017. Interest is payable semiannually on July 1 and January 1. Mcgee Company uses the effective interest method of amortization for bond premium or discount. Assume an effective yield of 6% in Pricing the bond. Prepare the journal entries to record the following (round to the nearest dollar.) The issuance of the bonds. The payment of interest and related amortization July 1. The accrual of interest and the related...
Adonis Corporation issued 10-year, 7% bonds with a par value of $130,000. Interest is paid semiannually....
Adonis Corporation issued 10-year, 7% bonds with a par value of $130,000. Interest is paid semiannually. The market rate on the issue date was 6%. Adonis received $139,674 in cash proceeds. Which of the following statements is true? Adonis must pay $139,674 at maturity plus 20 interest payments of $4,550 each. Adonis must pay $130,000 at maturity plus 20 interest payments of $4,550 each. Adonis must pay $130,000 at maturity plus 20 interest payments of $3,900 each. Adonis must pay...
Dean Corp. issued $500,000 of 7% debentures on January 1, 2018, with interest payable semiannually on...
Dean Corp. issued $500,000 of 7% debentures on January 1, 2018, with interest payable semiannually on June 30 and December 31 to yield 6%. The bonds mature in 5 years. Prepare an amortization table for the bonds. Make sure you provide column headers. Excel would be the best way to prepare this. Write out in pencil your labelled calculations for the first two interest payments. Write the entries for the first two payments. Why would the issuer not want to...
A company issues $680,000 of 5% bonds, due in 10 years, with interest payable semiannually on...
A company issues $680,000 of 5% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: 1. The market interest rate is 5% and the bonds issue at face amount. 2. The market interest rate is 4% and the bonds issue at a premium 3. The market interest rate is 6% and the bonds issue...
Christmas Anytime issues $810,000 of 7% bonds, due in 20 years, with interest payable semiannually on...
Christmas Anytime issues $810,000 of 7% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year.     Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: Required: 1. The market interest rate is 7% and the bonds issue at face amount. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round...
Christmas Anytime issues $800,000 of 7% bonds, due in 15 years, with interest payable semiannually on...
Christmas Anytime issues $800,000 of 7% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Calculate the issue price of a bond and complete the first three rows of an amortization schedule when: 1. The market interest rate is 7% and the bonds issue at face amount 2. The market interest rate is 8% and the bonds issue at a discount. 3.. The market interest rate is 6% and the bonds issue...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT