Hillside issues $1,200,000 of 8%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,468,794.
Required:
1. Prepare the January 1, 2017, journal entry
to record the bonds’ issuance.
2(a) For each semiannual period, complete the
table below to calculate the cash payment.
2(b) For each semiannual period, complete the
table below to calculate the straight-line premium
amortization.
2(c) For each semiannual period, complete the
table below to calculate the bond interest expense.
3. Complete the below table to calculate the total
bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization
table using the straight-line method
5. Prepare the journal entries to record the first
two interest payments.
In: Accounting
|
Masterson, Inc., has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, has a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, has a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years. |
|
Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? |
In: Finance
During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8 million common shares, $1 par per share, and 1 million preferred shares, $50 par per share. Feb. 12 Sold 2 million common shares, for $9 per share. 13 Issued 40,000 common shares to attorneys in exchange for legal services. 13 Sold 80,000 of its common shares and 4,000 preferred shares for a total of $945,000. Nov. 15 Issued 380,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000. Required: Prepare the appropriate journal entries to record each transaction. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
In: Accounting
Hillside issues $1,000,000 of 6%, 15-year bonds dated January 1,
2019, that pay interest semiannually on June 30 and December 31.
The bonds are issued at a price of $864,113.
Required:
1. Prepare the January 1 journal entry to record
the bonds’ issuance.
2(a) For each semiannual period, complete the
table below to calculate the cash payment.
2(b) For each semiannual period, complete the
table below to calculate the straight-line discount
amortization.
2(c) For each semiannual period, complete the
table below to calculate the bond interest expense.
3. Complete the below table to calculate the total
bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line
amortization table.
5. Prepare the journal entries to record the first
two interest payments.
In: Finance
Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1,
2017, that pay interest semiannually on June 30 and December 31.
The bonds are issued at a price of $4,895,980.
Required:
1. Prepare the January 1, 2017, journal entry to
record the bonds’ issuance.
2(a) For each semiannual period, complete
the table below to calculate the cash payment.
2(b) For each semiannual period, complete
the table below to calculate the straight-line premium
amortization.
2(c) For each semiannual period, complete
the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total
bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization
table using the straight-line method.
5. Prepare the journal entries to record the first
two interest payments.
In: Accounting
Your local pizzeria is having a special offer on medium pizzas. The first pizza will cost you $10, but if you buy a second pizza it will only cost you $5. What aspect of consumer theory does this illustrate?
Explain why a rational consumer does not spend all of her income buying only her favourite product.
a) Suppose that Daniel is willing to pay a maximum of $5 for his first slice of pizza. For each additional slice, he would be prepared to pay up to 50 cents less. If Daniel could obtain the pizza for free, how many slices would he eat?
b) If the price of a slice of pizza happened to be $2, how many
slices would he purchase (assuming his budget allowed it)? What
would be his total consumer surplus as a result?
Number of slices:
Consumer surplus: $
In: Economics
Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1,
2019, that pay interest semiannually on June 30 and December 31.
The bonds are issued at a price of $1,713,594.
Required:
1. Prepare the January 1 journal entry to record
the bonds’ issuance.
2(a) For each semiannual period, complete the
table below to calculate the cash payment.
2(b) For each semiannual period, complete the
table below to calculate the straight-line premium
amortization.
2(c) For each semiannual period, complete the
table below to calculate the bond interest expense.
3. Complete the below table to calculate the total
bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line
amortization table.
5. Prepare the journal entries to record the first
two interest payments.
In: Accounting
Hillside issues $1,800,000 of 7%, 15-year bonds dated January 1,
2017, that pay interest semiannually on June 30 and December 31.
The bonds are issued at a price of $1,555,401.
Required:
1. Prepare the January 1, 2017, journal entry
to record the bonds’ issuance.
2(a) For each semiannual period, complete the
table below to calculate the cash payment.
2(b) For each semiannual period, complete the
table below to calculate the straight-line discount
amortization.
2(c) For each semiannual period, complete the
table below to calculate the bond interest expense.
3. Complete the below table to calculate the total
bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization
table using the straight-line method.
5. Prepare the journal entries to record the first
two interest payments.
In: Accounting
Cool Sky reports the following costing data on its product for
its first year of operations. During this first year, the company
produced 44,000 units and sold 36,000 units at a price of $110 per
unit.
| Manufacturing costs | |||
| Direct materials per unit | $ | 42 | |
| Direct labor per unit | $ | 16 | |
| Variable overhead per unit | $ | 5 | |
| Fixed overhead for the year | $ | 396,000 | |
| Selling and administrative costs | |||
| Variable selling and administrative cost per unit | $ | 9 | |
| Fixed selling and administrative cost per year | $ | 110,000 | |
2a. Assume the company uses variable costing. Determine its product cost per unit and 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
|
In: Accounting
Williams Co. recently issued bonds with a face value of 10,000,000 and a coupon rate of 3% for 8 years. The current market rate of interest is 4% and the bonds pay interest semiannually.
1) Please compute the issuing price of the bond, using a financial calculator or Excel. [Note: you don't have to show me the Present Value (PV) of the principle or PV of the interest payment. All I am asking for is a number for the PV of the bonds or cash flows]
2) Please write down the journal entries reflecting the premium or discounts of this bond issuance. [Hint: How much is the premium or discount on the bond issue date?]
3) Please write down the journal entries reflecting this amortization of the premium or discount at the end of the first year (2 payments) [Hint: How much is the amortized premium or discount at the end of the first year (2 payments)? ].
In: Accounting