On October 1, 2020, Eastern Timber Inc. has available for issue $850,000 bonds due in four...

On October 1, 2020, Eastern Timber Inc. has available for issue $850,000 bonds due in four years. Interest at the rate of 5.00% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

a) 6%

b) 5%

c) 4%

Solutions

Expert Solution

ekkarill92 answered 7 months ago

Next > < Previous

Related Solutions

On October 1, 2017, Eastern Timber Inc. has available for issue $720,000 bonds due in four...

On October 1, 2017, Eastern Timber Inc. has available for issue $720,000 bonds due in four years. Interest at the rate of 9.50% is to be paid quarterly. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.) Issue Price a.10.50% b.9.50% c.8.50%

Sheffield Corp. issued $6,498,000 of 8% bonds on October 1, 2020, due on October 1, 2025....

Sheffield Corp. issued $6,498,000 of 8% bonds on October 1, 2020, due on October 1, 2025. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 9% effective annual interest. Sheffield Corp. closes its books annually on December 31. Complete the following amortization schedule for the dates indicated. Use the effective-interest method. (Round answers to 0 decimal places, e.g. 5,275.) Date Cash Interest Expense Bond Discount Carrying Amount of...

Chinook Inc. has available for issue a $3,270,000 bond due in eight years. Interest at the...

Chinook Inc. has available for issue a $3,270,000 bond due in eight years. Interest at the rate of 6.50% is to be paid semiannually. Calculate the issue price if the market interest rate is: (Do not round intermediate calculations. Round the final answers to the nearest whole dollar amount.) a.5.50% b.6.50% c.7.25%

Grove Corporation issued $2,400,000 of 8% bonds on October 1, 2012, due on October 1, 2017....

Grove Corporation issued $2,400,000 of 8% bonds on October 1, 2012, due on October 1, 2017. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31. Instructions (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Debit Credit Carrying Amount Credit Cash Interest Expense Bond Discount ...

A. Grove Corporation issued Dh 720,000 of 8% bonds on October 1, 2016, due on October...

A. Grove Corporation issued Dh 720,000 of 8% bonds on October 1, 2016, due on October 1, 2021. The interest is to be paid twice a year on April 1 and October 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31. Instructions Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. DebitCredit Credit Cash Interest Expense Bond Discount...

The Kingbird Company issued $360,000 of 11% bonds on January 1, 2020. The bonds are due...

The Kingbird Company issued $360,000 of 11% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 102. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Kingbird Company records straight-line amortization semiannually. (a) choose a transaction date Jan. 1, 2020July 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit...

(14) Bond issue and retirement On June 30, 2020, Desjardin Inc. issued $1,000,000 in bonds. The...

(14) Bond issue and retirement On June 30, 2020, Desjardin Inc. issued $1,000,000 in bonds. The bonds pay interest twice a year on December 31 and June 30, mature in 10 years, and have a coupon rate of 5%. They were sold to yield 5.6%. Desjardin follows IFRS. On December 31, 2021, Desjardin repurchased 40% of the bonds. At that time the bonds were selling at 98. Instructions (Round all values to the nearest dollar) a) What was the issue...

On October 1, 2020, Philly Company purchased inventory from a German supplier for 80,000 Euros due...

On October 1, 2020, Philly Company purchased inventory from a German supplier for 80,000 Euros due on January 31, 2021. Simultaneously, Philly entered into a forward contract for 80,000 Euros for delivery on January 31, 2020. Payment was made to the foreign supplier on 1/31/2021. Spot rates on October 1, December 31, and January 31, were $1.62, $1.51, and $1.45, respectively. Forward rates on October 1 and December 31 were $1.33 and $1.39 respectively. Required: Prepare all journal entries related...

Auerbach Inc. issued 5% bonds on October 1, 2018. The bonds have a maturity date of...

Auerbach Inc. issued 5% bonds on October 1, 2018. The bonds have a maturity date of September 30, 2028 and a face value of $2,000,000. The bonds pay interest each March 31 and September 30, starting on 3/31/19 and finishing at maturity. The effective interest rate established by the market is 6% annually at the date of issue. How much did Auerbach receive from the bond issue on 10/1/2018?

Closter, Inc., has a bond issue with a face value of $1,000 that is coming due...

Closter, Inc., has a bond issue with a face value of $1,000 that is coming due in one year. The value of the company’s assets is currently $1,180. Ashok Vora, the CEO, believes that the assets in the company will be worth either $970 or $1,470 in a year. The going rate on one-year T-bills is 6 percent. a-1. What is the value of the company’s equity? a-2. What is the value of the debt? Suppose the company can reconfigure...

Subjects