On September 1, 19X1, Simons Company sold and issued to Trammel Company $60,000, 5-year, 9% coupon...

On September 1, 19X1, Simons Company sold and issued to Trammel Company $60,000, 5-year, 9% coupon annual interest rate (payable semiannually) bonds for a price that would yield the market annual rate of interest of 8%. The bonds were dated July 1, 19X1, and interest is payable each June 30 and December 31. The accounting period for Simons ends on December 31.

Required:

Calculate the cash price at September 1,and record the journal entries for issuance and for the first 2 interest periods.

Expert Solution

PLEASE LIKE THE ANSWER IF YOU FIND IT HELPFUL OR YOU CAN COMMENT IF YOU NEED CLARITY / EXPLANATION ON ANY POINT.

ekkarill92 answered 1 year ago

On September 1, 19X1, Golf Company sold and issued to Youngblood Company $60,000, 5-year, 9% coupon...

On September 1, 19X1, Golf Company sold and issued to Youngblood Company $60,000, 5-year, 9% coupon annual interest rate (payable semiannually) bonds for a price that would yield the market annual rate of interest of 8%. The bonds were dated July 1, 19X1, and interest is payable each June 30 and December 31. The accounting period for Golf ends on December 31. Record the cash price at September 1, and the journal entries for issuance and the first 2 interest...

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?

IBM has just issued a callable (at par) 5 year, 9% coupon bond with quarterly coupon...

IBM has just issued a callable (at par) 5 year, 9% coupon bond with quarterly coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $102 per $100 face value, implying a yield to maturity of 8.78%. What is the bond's yield to call? 8.78% 6.86% 8.15% 7.91%

1.On January 1, a company issued and sold a $408,000, 9%, 10-year bond payable, and received...

1.On January 1, a company issued and sold a $408,000, 9%, 10-year bond payable, and received proceeds of $403,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is: a. Debit Bond Interest Expense $36,720; Credit cash $36,720 b. Debit Bond Interest Expense $18,360; Credit Cash $18,360 c. Debit Bond INterest Expense $18,360; debit dicsount on bonds payable $250; credit cash...

Exactly 2 years ago your company issued a series of 5-year, 9% bonds, with coupon payments...

Exactly 2 years ago your company issued a series of 5-year, 9% bonds, with coupon payments made semi- annually. The bonds have a face value of $1000. The bonds also have a call feature attached to them which allows your company to call the bonds three years after the issuing date (i.e. After the 6th coupon payment) at a premium of 10% above the face value. Investors currently require an annual return of 12% on their investment in your company’s...

Problem 1: On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September...

Problem 1: On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for $1,067,950 an effective (market) rate of 8%. Interest is payable semi-annually on October 1 and April 1. The bonds were purchased by Juan’s Junk and Basura Inc. Present the entries to record the following transactions for the current year on BOTH sets of books: (Issuing Corporation and Investor) a) Issuance of bonds b) Accrual of interest and amortization for the period ended...

On January 1, a company issued and sold a $430,000, 5%, 10-year bond payable, and received...

On January 1, a company issued and sold a $430,000, 5%, 10-year bond payable, and received proceeds of $420,000. Interest is payable each June 30 and December 31. The company uses the straight line method to amortize the discount. The carrying value of the bonds immediately after the second interest payment is

5‐year bond is issued with a 5% coupon. After 1 year and 40 days from its...

5‐year bond is issued with a 5% coupon. After 1 year and 40 days from its issue, the owner decides to sell it. Calculate the price at which the buyer sells the bond (clean price) and the actual price received by the seller. Consider an interest rate of 3%. Clean price: Answer % (rounded to the second decimal) Price paid by the buyer: Answer % (rounded to the second decimal) Use 1 year=365 days for calculations

Max's Company invests in the bonds issued by CarmCorp. On 1/1/20 Max buys $60,000 of 5%...

Max's Company invests in the bonds issued by CarmCorp. On 1/1/20 Max buys $60,000 of 5% bonds that pay interest on 1/1. They mature in 10 years and yield 6%. Max pays $55,584. On 12/31/20, the fair value of the bonds is $60,800. Assuming the bonds are classified as "Trading", prepare the journal entries for 1/1/20, 12/31/20, and 1/1/21. You may omit (leave out) the closing entries

h&M has just issued a callable (at par) 9 year, 9% coupon bond with annual coupon...

h&M has just issued a callable (at par) 9 year, 9% coupon bond with annual coupon payments. The bond can be called at par in one year or anytime thereafter on a coupon payment date. It has a price of $96 per $100 face value. What is the bond's yield to call? Apple has just issued a callable (at par) 9 year, 15% coupon bond with annual coupon payments. The bond can be called at par in one year or...

Question