Question
In: Accounting
Waveland Corporation issued a $1,200,000 in bonds which mature in 8 years. The bonds pay an...
Waveland Corporation issued a $1,200,000 in bonds which mature in 8 years. The bonds pay an annual coupon rate of 12%. Interest payments are made semi-annually. The current market rate for similar bonds is 10%. The bonds sell for $1,330,053.
a. Show the journal entries for the bond issuance, first interest payment, and bond retirement at maturity
Waveland Corporation issued a $1,200,000 in bonds which mature in 8 years. The bonds pay an annual coupon rate of 12%. Interest payments are made semi-annually. The current market rate for similar bonds is 10%. The bonds sell for $1,330,053.
b. Create a table showing the amortized or discount for the first two years of the bonds.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Waveland Corporation issued a $1,200,000 in bonds which mature in 8 years. The bonds pay an...
Waveland Corporation issued a $1,200,000 in bonds which mature
in 8 years. The bonds pay an annual coupon rate of 12%. Interest
payments are made semi-annually. The current market rate for
similar bonds is 10%. The bonds sell for $1,330,053.
Create a table showing the amortized or discount for the first
two years of the bonds.
Churchill Corporation just issued bonds that will mature in 10 years. George Corporation just issued bonds that...
Churchill Corporation just issued bonds that will mature in 10
years. George Corporation just issued bonds that will
mature in 12 years. Both bonds are standard coupon bonds
and cannot be retired early. The two bonds are equally
liquid. Which of the following statements is
correct?
If the yield curve for Treasury securities is flat, Churchill's
bond will have the same yield as George's bonds.
If the yield curve for Treasury securities is upward sloping,
George's bonds will have a higher yield than Churchill's...
P&P Corporation has issued 10,000 units of face value bonds that mature in 8 years and...
P&P Corporation has issued 10,000 units of face value bonds
that mature in 8 years and pay a coupon rate of 6% paid annually.
Calculate the yield if each bond unit is selling at $980.
Goody's bonds pay a 8 percent annual coupon rate. The bonds mature in 13 years. The...
Goody's bonds pay a 8 percent annual coupon rate. The bonds
mature in 13 years. The bond pays interest semiannually. What is
the price per bond if the face value is $1,000 and the yield to
maturity is 10 percent? (Round your answer to two
decimal places. Do not enter dollar signs.)
Xerox issued bonds that pay $57.50 in interest each year and will mature in 10 years....
Xerox issued bonds that pay $57.50 in interest each year and
will mature in 10 years. You are thinking about purchasing the
bonds. You have decided that you would need to receive a return of
7 percent on your investment. What is the value of the bond to you,
first assuming that the interest is paid annually and then
semiannually?
a. If the interest is paid semiannually, the value of the bond
is _ ?
BankMart Inc. recently issued bonds that mature in 8 years. They have a par value of...
BankMart Inc. recently issued bonds that mature in 8 years. They
have a par value of $1,000 and an annual coupon of 4%. Your
required rate of return is 10%.
Hint:
This bond pays a fixed amount of coupon at the end of each
period and pays the par value when it matures.
annual coupon payment = par value * annual coupon rate.
What is the maximum price you want to pay for the bond?
Sheridan, Inc., has outstanding bonds that will mature in six years and pay an 8 percent...
Sheridan, Inc., has outstanding bonds that will mature in six
years and pay an 8 percent coupon semiannually. If you paid
$1,093.30 today and your required rate of return was 5.5
percent.
How much should you have paid for the bond?
Did you pay the right price for the bond?
Schumacher Homes has 8 percent bonds outstanding that mature in 13 years. The bonds pay interest...
Schumacher Homes has 8 percent bonds outstanding that mature in
13 years. The bonds pay interest semiannually. These bonds have a
par value of $1,000 and are callable in 2 years at a premium of
$75. What is the yield to call if the current price is equal to
103.25 percent of par?
9.66 percent
7.75 percent
8.98 percent
8.06 percent
McDonald's Corporation has 8 7/8% bonds that mature in 15 years. What is the value of...
McDonald's Corporation has 8 7/8% bonds that mature in 15 years.
What is the value of a $1000 par value McDonald's Corporation bond
for each of the following required rates of return assuming the
investor will hold the bond to maturity assume the coupon is paid
annually?
a. 10.00%
b. 8.875%
c. 6.00%
On January 1, 2014, Cron Corporation issued $740,000 in bonds that mature in ten years. The...
On January 1, 2014, Cron Corporation issued $740,000 in bonds that
mature in ten years. The bonds have a stated interest rate of 12
percent and pay interest on June 30 and December 31 each year. When
the bonds were sold, the market rate of interest was 10 percent.
The company uses the effective-interest amortization method. (FV of
$1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables
provided.)
Required:
1.
What...
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