Debt Valuation: Interest-Bearing Debentures. At the beginning of the year, Marshall Square, Inc. issued $100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent. Required Calculate the proceeds received by Marshall Square when the bonds were sold.
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Debt Valuation: Interest-Bearing Debentures. At the beginning of the year, Marshall Square, Inc. issued
$100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent.
Required
- Calculate the proceeds received by Marshall Square when the bonds were sold.
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- Debt Valuation: Interest-Bearing Debentures. At the beginning of the year, Marshall Square, Inc. issued $100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent. Required: 1. Calculate the market value of the bonds if, after five years, the market yield rate is four percent per period (i.e., 8% annually).At the beginning of the year, Marshall Square, Inc. issued TA 2, 3 $100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent. Calculate the gain or loss on retirement. What is the impact on bonds payable, bond discount and cash?Edgar Ltd issues $7 million in 6-year, 10%, semi-annual coupon debentures. The rate of return required by the market is 8% per annum. What is the journal entry to record the first payment of interest assuming using the effective-interest method to amortise any discount or premium (rounded to the nearest dollar)?
- A company issues bonds with a par value of $370,000. The bonds mature in 5 years and pay 8% annual interest in semiannual payments. The annual market rate for the bonds is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: Present value of an annuity (series of payments) for 10 periods at 3% Present value of an annuity (series of payments) for 10 periods at 4% Present value of 1 (single sum) due in 10 periods at 3% Present value of 1 (single sum) due in 10 periods at 4% Table Values are Based on: n = i = Cash Flow Par (maturity) value Interest (annuity) Price of bonds Table Value Amount Present Value 8.5302 8.1109 0.7441 0.6756Debt Valuation: Interest-Bearing Debentures. At the beginning of the year, Marshall Square, Inc. issued $100 million (maturity value) of 20-year debentures. The debentures carry a 4.75 percent annual coupon rate (compounded semi-annually) and interest payments are made semi-annually. The market rate of interest at the time the debentures were issued was 5 percent. Required: 1. Calculate the cost of retiring the Marshall Square bonds after 15 years assuming that the market yield rate is three percent per period (six percent annually) at the time of retirement. Calculate the resulting gain or loss. Where will the gain/loss be reported on the company’s statement of cash flows?A company issues bonds with a par value of $390,000. The bonds mature in 5 years and pay 8% annual interest in semiannual payments. The annual market rate for the bonds is 6%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: Present value of an annuity (series of payments) for 10 periods at 3% Present value of an annuity (series of payments) for 10 periods at 4% Present value of 1 (single sum) due in 10 periods at 3% Present value of 1 (single sum) due in 10 periods at 4% Table Values are Based on: n= /=; Cash Flow Par (maturity) value Interest (annuity) Price of bonds 10 3.0% Table Value Amount Present Value $ 0.00 8.5302 8.1109 0.7441 0.6756 Please help me inderstand. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. (EY of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. 3. What bonds payable amount will Clearwater report on its December 31 balance sheet? Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.…The company issues 10.0%, 10-year bonds with a total face amount of $1,000,000. The market interest rate for bonds of similar risk and maturity is 9.8%. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET. 1. $ 2. $ 3. $ How much will be paid in interest each interest payment? (rounded to nearest dollar). What is the present value of the interest payments? (rounded to nearest dollar). What is the issue price of the bond?Krystian Inc. issued 12-year bonds with a face value of $110,000 and a stated rate of 5% when the market rate was 7%. Interest was paid semi-annually. A. Calculate the cash flows the purchaser of the bonds (the investor) will receive throughout the bond term. NOTE: The requirement is referring to total interest and principal. B. Would an investor be willing to pay more or less than face value for this bond? Less than
- A company issues bonds with a par value of $400,000. The bonds mature in 5 years and pay 10% annual interest in semiannual payments. The annual market rate for the bonds is 8%. Compute the price of the bonds on their issue date. The following information is taken from present value tables: Present value of an annuity (series of payments) for 10 periods at 4% Present value of an annuity (series of payments) for 10 periods at 5% Present value of 1 (single sum) due in 10 periods at 4% Present value of 1 (single sum) due in 10 periods at 5% Table Values are Based on: i= Cash Flow Par (maturity) value Interest (annuity) Price of bonds 10 4.0% Table Value Amount Present Value $ 0.00 8.1109 7.7217 0.6756 0.6139A company issued 9%, 10-year bonds with a face amount of $100 million. The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually. At what price did the bonds sell? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar. Use tables, Excel, or a financial calculator.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Price of bondsABC Inc. plans to issue $500,000 face value bonds with a stated interest rate of 12% and market interest rate of 10%. They will mature in 10 years. Interest will be paid semiannually. At the date of issuance, compute the present value (bond issue price) of the future cash flows. Following are appropriate factors from tables: Table % / n Present Value of $1 Present Value of ordinary annuity of $1 10%/10 .38554 6.14457 12%/10 .32197 5.65022 5%/20 .37689 12.46221 6%/20 .31180 11.46992 Required Computation: