The following information pertains to a bond issue of the Fusso Corporation: Maturity value: $1,000,000 Maturity...

The following information pertains to a bond issue of the Fusso Corporation:

Maturity value: $1,000,000

Maturity date: December 31, 2016

Stated interest rate (Coupon rate): 8%

Interest payments are made annually on December 31st

Date of issue: December 31, 2011

Effective (market) interest rate (Yield to maturity) at issue: 10%

On December 31, 2014, the Fusso paid $953,000 to retire entire bonds. $953,000 did not include the coupon payment. The coupon was paid just before the announcement of the bond retirement.

Determine the amount of the gain or loss on the bond retirement.(Express gain using +, and loss using -. Format: +$xx,xxx or -$xx,xxx)

If you do not include + or -, your answer is not correct.

Expert Solution

All amounts in USD

ekkarill92 answered 1 year ago

The following information pertains to a bond issue of the Atomic Corporation: Maturity value: $1,000,000 Maturity...

The following information pertains to a bond issue of the Atomic Corporation: Maturity value: $1,000,000 Maturity date: January 1, 2023 Stated interest rate: 8% Interest payments are made annually on December 31st Date of issue: January 1, 2018 The bond is dated January 1, 2018 Effective (market) interest rate: 10% Required: • At what price were the bonds issued? • Using the effective interest method, prepare an amortization schedule showing annual interest expense, annual discount or premium amortization, and carrying...

The following information pertains to Amigo Corporation: Month Sales &

The following information pertains to Amigo Corporation: Month Sales Purchases July $30,000 $10,000 August 34,000 12,000 September 38,000 14,000 October 42,000 16,000 November 48,000 18,000 December 60,000 20,000 ? Cash is collected from customers in the following manner: Month of sale (2% cash discount) 30% Month following sale 50% Two months following sale 15% Amount uncollectible 5% ? 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Required: a. Prepare a summary of cash collections for the 4th quarter. b. Prepare a summary of cash disbursements for the 4th quarter.

Costly Corporation plans a new issue of bonds with a par value of $1000, a maturity...

Costly Corporation plans a new issue of bonds with a par value of $1000, a maturity of 28 years, and an annual coupon rate of 10.0%. Flotation costs associated with a new debt issue would equal 8.0% of the market value of the bonds. Currently, the appropriate discount rate for bonds of firms similar to Costly is 6.0%. The firm's marginal tax rate is 50%. What will the firm's true cost of debt be for this new bond issue?

Assume that the City of Rockwall sold an issue of $1,000 maturity value, tax-exempt (municipal bond),...

Assume that the City of Rockwall sold an issue of $1,000 maturity value, tax-exempt (municipal bond), zero coupon bonds 5 years ago. The bonds had a 25-year maturity when they were issued, and the interest rate built into the issue was a nominal 10 percent, but with semiannual compounding. The bonds are now callable at a premium of 10 percent over the accrued value. What effective annual rate of return would an investor who bought the bonds when they were...

J&J has an outstanding issue of 20- year maturity bond with face value of $1,000 and...

J&J has an outstanding issue of 20- year maturity bond with face value of $1,000 and a coupon of 8%, paying coupon interest semi-annually. If the market price of this bond is $1200, what is the rate of return investors are demanding on this bond?

Lily Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2015,...

Lily Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2015, its first year of operation, the company has the following stock transactions. Jan 1 paid the state $5000 for incorporation fees Jan 15 Issued 500,000 shares of stock at $6 per share Jan 30 Attorneys for the company accepted 500 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value...

Regarding to the relationship between bond maturity and bond value, what’s of the following statements is...

Regarding to the relationship between bond maturity and bond value, what’s of the following statements is not correct. At maturity, the value of any bond must equal its par value The value of a premium bond would decrease to its par value. The value of a discount bond would increase to its par value. A par-value bond stays at $1,000 even if the market interest rate changes.

What is the present value of the following bond offering. Face value of $1000, maturity in...

What is the present value of the following bond offering. Face value of $1000, maturity in 10 years, the coupon rate is 8%, the yield to maturity is also 8%, coupon is paid semi-annually. a. $1,050 b. $950 c. 825 d. 1,231 e. 1,000

Find the duration of the bond with the given information. Face value=RM1000 Maturity=6 years Coupon=5% Bond...

Find the duration of the bond with the given information. Face value=RM1000 Maturity=6 years Coupon=5% Bond value=RM1020

Question 2 - Calculate the yield to maturity of the following bond with a par value...

Question 2 - Calculate the yield to maturity of the following bond with a par value of $1,000 that pays a 3.9% coupon semiannually. The bond was settled on Jan 1, 2010 and matures on Jan 1, 2032. It currently trades at a price of $972.84 (5 points) Coupon Bond YTM settlement date: 01/01/2020; maturity date: 01/01/2032; coupon rate: 3.9%; coupons per year: 2; face value (% of par): 100; Bond price (% of par): $972.84. What is the YTM?...

Question